NCLT Mumbai admits S&T Interiors into insolvency after failed loan settlement

The National Company Law Tribunal (NCLT), Mumbai bench, on 23 October 2026 admitted S&T Interiors and Contracting Services Private Limited, a Mumbai company, into the corporate insolvency resolution process (CIRP). The petition, under Section 7 of the Insolvency and Bankruptcy Code (IBC), was filed by Assets Care & Reconstruction Enterprise Limited, an asset reconstruction company acting as trustee of ACRE-144-Trust. It claimed a default of Rs 38.84 crore as on 15 July 2024.

What Happened

According to the order, the company took fund-based and non-fund-based facilities from Standard Chartered Bank from 2017, later raised to Rs 43.50 crore. After a default, the bank filed an insolvency petition in 2021. During that case the parties signed a settlement in February 2023 under which the company agreed to pay Rs 6 crore in full and final settlement. The company paid the first instalment of Rs 1.20 crore and the bank withdrew its petition, but the second instalment of Rs 4.80 crore, due by 16 May 2023, was not paid, the order records.

The bank assigned the loan to the asset reconstruction company in November 2023. In March 2024 the new creditor revoked the settlement and recalled the full dues. The company argued, among other things, that the default fell in the period when the law barred new insolvency cases (Section 10A). The tribunal rejected this, holding that the default continued beyond that period and that the company had itself admitted in a dispute remark that Rs 4.5 crore was still outstanding.

The tribunal declared a moratorium under Section 14 of the IBC, appointed an interim resolution professional, and directed the creditor to deposit Rs 5 lakh towards initial costs.

What It Means

Admission into insolvency is not a finding of fraud or mismanagement. The board's powers pass to the interim resolution professional, and suits against the company and the sale of its assets are barred while the process runs.

The tribunal ordered the public announcement of the process to be made immediately. Creditors, suppliers and employees owed money should watch for that announcement, which sets out how and by when to file claims. The order may be appealed to the National Company Law Appellate Tribunal (NCLAT).

Source: NCLT order