NCLT Mumbai Admits Petition against Sahara India Medical Institute, Initiates Insolvency Process

NCLT Mumbai Admits Petition against Sahara India Medical Institute, Initiates Insolvency Process

The National Company Law Tribunal (NCLT) in Mumbai, consisting of Kishore Vemulapalli (Judicial Member) and Prabhat Kumar (Technical Member), while presiding over a petition lodged in the case of Aprn Enterprises Private Limited v Sahara India Medical Institute Limited, has commenced the Corporate Insolvency Resolution Process (CIRP) against Sahara India Medical Institute Limited. This entity is a part of the Sahara Group, which is promoted by Subrata Roy.

Sahara India Pariwar, commonly known as the Sahara Group, was established by Subrata Roy in 1978. The Sahara Group is involved in a diverse range of business sectors, including finance, infrastructure and housing, real estate, sports, power generation, manufacturing, media and entertainment, healthcare, life insurance, educational institutions, offline and online education, retail, e-commerce, hospitals, artificial intelligence, hospitality, and many more.

Sahara India Medical Institute Limited, identified as the Corporate Debtor, is a part of the Sahara Group and operates in the healthcare sector. It manages the Sahara Hospital as part of its business operations.

Dewan Housing Finance Corporation Limited, which is now known as Piramal Capital & Housing Finance Limited, had provided financial support amounting to ₹500 crore to the Corporate Debtor. The Corporate Debtor, however, failed to meet its repayment obligations, resulting in a default on the financial assistance provided.

Consequently, Piramal Capital & Housing Finance Limited filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC), seeking the commencement of the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor due to a default amounting to ₹940.96 crores, including accrued interest.

During this period, the debt was transferred to APRN Enterprises Private Limited, which then became the Financial Creditor. Consequently, APRN Enterprises Private Limited's name was substituted in the Section 7 petition as the new petitioner.

The Bench dismissed the Corporate Debtor's argument that the petition under the Insolvency and Bankruptcy Code (IBC) was an attempt to force a financially stable company into insolvency. It stated that based on the discussion thus far, it did not see any valid basis in the Corporate Debtor's claim that the current application aimed to place a solvent company into the Resolution Process. This was seen as unlikely to harm the interests of the Corporate Debtor or convert the proceedings into a mere recovery process.

“Had the Applicant contemplated recovery of its debt as the only objective, it could have taken action under the SARFAESI Act, and realised its security interest so as to recover its dues. However, despite this, the act of filing of present application only substantiates the belief that the object of the Financial Creditor is to seek the resolution of distress of the Corporate Debtor and nothing else,” the Bench said.

The Bench noted that the Corporate Debtor had indeed defaulted on a debt that was both due and payable, and this default exceeded the minimum pecuniary threshold specified in Section 4(1) of the IBC. As a result, the petition filed under Section 7 of the IBC was accepted, and the initiation of the Corporate Insolvency Resolution Process against the Corporate Debtor was authorised.

Jayesh Natvarlal Sanghrajka has been designated as the Interim Resolution Professional for overseeing the Corporate Insolvency Resolution Process in this case.