NCLT admits Canara Bank's Section 7 plea; insolvency process initiated, IRP appointed, appeal planned

The NCLT Mumbai Bench-VI has admitted Canara Bank's Section 7 application and initiated the Corporate Insolvency Resolution Process (CIRP) against the company.

Wed 30 Sep 2026

NCLT Order

NCLT Mumbai Bench-VI admitted Canara Bank's Section 7 application and initiated CIRP on 29.09.2026

Financial Debt Claimed

Rs. 1126,41,34,714 (principal plus interest) as on 31.01.2026

Principal Outstanding

142,51,56,720 as on 31.01.2026

Date of Default

28.03.2012

Interim Resolution Professional

Mr. Vijay Pitambar Lulla appointed as IRP

What happened

The National Company Law Tribunal, Mumbai Bench-VI, in C.P. (IB) No. 297/MB/2026 (Canara Bank vs. PBA Infrastructure Limited), has admitted the application shared by Canara Bank, the Financial Creditor, under Section 7 of the Insolvency and Bankruptcy Code, 2016, for initiation of the Corporate Insolvency Resolution Process (CIRP) in respect of default in payment of loan and interest. The order was pronounced on 29.09.2026.

Who now runs the company

• Mr. Vijay Pitambar Lulla has been appointed as the Interim Resolution Professional (IRP).
• The management and affairs of the company shall be dealt with in accordance with the provisions of the IBC and the applicable regulations.
• In simple terms, once CIRP begins, the board's powers stand suspended and the insolvency professional takes charge, with creditors' claims collected and a resolution process run under the Code.

The amounts involved

• Financial debt claimed as being in default: Rs. 1126,41,34,714 (principal plus interest).
• Principal outstanding across the accounts as on 31.01.2026: 142,51,56,720.
• The dues are spread across 67 loan and guarantee accounts, the largest being a principal of 46,76,51,673.94 with principal plus interest of 3,95,91,48,450.48.

Background as set out by the bank

• Banking facilities with Canara Bank date back to 1974; a Working Capital Consortium Agreement was executed on September 10, 2003, later widened to more banks.
• Term Loan-I of INR 43.50 crores was sanctioned, and a Short-Term Loan of INR 25 crores was converted into Long Term Loan-II repayable over 60 months, secured by hypothecation, equitable mortgages in Mumbai, Pune and Nagpur, pledge of promoter shareholding and personal guarantees of promoter-directors.
• A Corporate Debt Restructuring package was approved in March 2012 with a two-year moratorium, concessional interest, a Funded Interest Term Loan of INR 6.66 crores and waiver of penal charges.
• The account slipped to NPA on June 30, 2013, treated as NPA from March 28, 2012. The CDR Empowered Group had required infusion of INR 10.00 crores by November 30, 2014; exit from the CDR mechanism was approved on October 28, 2015.
• A recall notice (December 2, 2015), a SARFAESI Section 13(2) notice (December 14, 2015) and a legal notice (April 27, 2016) followed. Five One-Time Settlement proposals by the company between 2017 and 2024 did not result in a settlement.
• On limitation, the bank relied on revival letters and the Supreme Court's ruling in Dena Bank vs. C. Shivakumar Reddy.

What it means for shareholders

Admission into CIRP is one of the most serious events that can occur at a listed company. Equity holders rank last in the IBC waterfall, after secured and unsecured creditors, so outcomes for shareholders depend entirely on the resolution plan that eventually gets approved. The company has stated it intends to file an appeal before the National Company Law Appellate Tribunal (NCLAT), which could affect the course of the process if allowed.

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