Continuing default on term loan, overdraft and invoked corporate guarantees; company under CIRP

The company has disclosed continuing defaults on loan repayments.

Wed 30 Sep 2026

Prudence ARC Default

Principal 16.44 crore, Interest 3.75 crore

Axis Bank Default

Principal 7.65 crore, Interest 4.51 crore

Total Outstanding Borrowings

32.33 Crores

Invoked Corporate Guarantees

Axis Bank 7.3 crore, Prudence ARC 16.69 crore

CIRP Status

Under Corporate Insolvency Resolution Process since 16.12.2022 per NCLT order

What was shared

The company, acting through its Resolution Professional, has made its periodic disclosure of defaults on repayment of principal and interest on borrowings from banks and financial institutions.

The default

• Nature of obligation: Term Loan, Overdraft and Corporate Guarantee
• Lenders: Prudence ARC and Axis Bank
• Date of default: 31/08/2026 (Since March, 2021 Onwards)
• Prudence ARC: Principal 16.44 crore, Interest 3.75 crore
• Axis Bank Limited: Principal 7.65 crore, Interest 4.51 crore

Facility details

• Axis Bank Ltd Term Loan: outstanding 7.16 crore, tenure 2 years, rate 11.65%, secured
• Axis Bank Ltd OD: outstanding 4.98 crore, tenure 2 years, rate 11.20%, secured
• Prudence ARC: outstanding 20.19 crore, tenure 2 years, rate 13.75%, secured
• Total outstanding borrowings from banks/financial institutions: 32.33 Crores

Invoked corporate guarantees

• Axis Bank Ltd, primary borrower Sri Gayatri Education Society: 7.3 crore, secured
• Prudence ARC, primary borrower Lakshya Forum for Competitions Private Limited: 16.69 crore, secured

These are amounts the company may have to bear because it had guaranteed loans taken by other entities, and the guarantees have been invoked by the lenders.

Insolvency status

The company is under Corporate Insolvency Resolution Process following the NCLT, Mumbai order dated 16th December, 2022 under the Insolvency and Bankruptcy Code, 2016. Claims are confirmed and further verification is in process as per the public announcement. A Committee of Creditors was constituted on 21-08-2023, and Mr. Arihant Nenawati was appointed as the new Resolution Professional on 22nd January, 2024.

Other claim under dispute

Shamrao Vithal Co-op Bank Ltd submitted a claim of Rs. 49.72 crore relating to a corporate guarantee issued for subsidiary Labh Ventures India Pvt Ltd. As the guarantee was not invoked before the insolvency commencement date of 16-12-2022, the claim was rejected. The bank's application before NCLT Mumbai was dismissed by order dated 27th March, 2025, and its appeal before the NCLAT is pending.

The loans earlier held by Assets Care & Reconstruction Enterprises Limited were re-assigned to Prudent ARC Limited through a deed of assignment dated 11th August, 2023.

How to read this

The disclosure reflects an ongoing situation rather than a fresh event; the update states that in view of the ongoing CIRP proceedings, no changes have occurred in the information previously submitted. Outcomes for shareholders in a resolution process depend on the resolution plan finally approved, where financial creditors' claims rank ahead of equity.

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