NCLT admits Standard Pharmaceutical into insolvency on guarantor default
The NCLT Kolkata bench admitted Standard Pharmaceutical into insolvency on 30 October 2026 on a plea by JM Financial ARC, which claimed Rs 95.16 crore as guarantor dues.
Key points
- The NCLT Kolkata bench admitted Standard Pharmaceutical Limited into the insolvency process in an order dated 30 October 2026.
- JM Financial ARC claimed Rs 95.16 crore under the company's guarantee for loans to another firm, according to the order.
- A moratorium now applies and claims will be invited by public announcement; the order may be appealed to the NCLAT.
The Kolkata bench of the National Company Law Tribunal (NCLT) has admitted Standard Pharmaceutical Limited into the corporate insolvency resolution process, in an order dated 30 October 2026. The tribunal allowed an application by JM Financial Asset Reconstruction Company Limited, which said the company owed it Rs 95.16 crore as on 31 October 2023 as guarantor of another company's loans.
What Happened
According to the order, Federal Bank had lent to a borrower, HR International Limited, and Standard Pharmaceutical gave a corporate guarantee and a mortgage of its property as security. The guarantee dated 28 September 2015 covered Rs 7.41 crore or the market value of 400 cottahs of the mortgaged property, whichever is higher. The borrower's accounts were classified as non-performing on 31 December 2015, and Federal Bank assigned the loans to JM Financial Asset Reconstruction Company on 30 March 2016.
The order records that the loans were restructured in 2017, the borrower later defaulted, and the asset reconstruction company invoked Standard Pharmaceutical's guarantee by a letter dated 15 February 2023. Settlement talks failed.
Standard Pharmaceutical argued that it had been discharged as guarantor by agreements signed in 2017 and that the application was time-barred. The tribunal held that the guarantee was not superseded by the later documents and that a default of Rs 1 crore or more had been shown. It admitted the petition and dismissed the company's own application on merits.
What It Means
An interim resolution professional, an insolvency professional who now runs the company, has been appointed and must make a public announcement inviting claims. A moratorium, a freeze on lawsuits, recovery actions and the sale of the company's assets, now applies. Creditors, employees and suppliers of the company should watch for the public announcement, which sets the deadline for filing claims; the order itself does not give it.
Admission into insolvency is not a finding of fraud or mismanagement. It means the tribunal found that a debt was owed and was in default. The NCLT's order may be appealed to the National Company Law Appellate Tribunal (NCLAT).
Source: NCLT order
Sources & Citations
- NCLT order — National Company Law Tribunal