ENA Sectors 2025-12-10 15:49:07 <p><span style="font-size:14px"><strong>Gandhinagar, Dec 10 (KNN)</strong> The National Company Law Tribunal (NCLT), Ahmedabad, has held that an insolvency application cannot be dismissed merely on allegations of fraud or malicious intent unless supported by clear and cogent evidence.</span></p> <p><span style="font-size:14px"><strong>Section 65 Requires Proof of Mala Fides</strong></span></p> <p><span style="font-size:14px">While admitting insolvency proceedings against Turnrest Resources, the NCLT held that Section 65 of the Insolvency and Bankruptcy Code (IBC) applies only when fraud or mala fides are proven with evidence, not mere allegations.</span></p> <p><span style="font-size:14px"><strong>Case Background</strong></span></p> <p><span style="font-size:14px">The proceedings arose from a petition filed by HDFC Bank Ltd on July 11, 2025, seeking initiation of the Corporate Insolvency Resolution Process (CIRP) against Turnrest Resources for a default of Rs 30.5 crore. </span></p> <p><span style="font-size:14px">The bank submitted sanction letters, supplemental agreements, an acknowledgment of debt dated October 1, 2023, and a demand notice issued on December 12, 2024.</span></p> <p><span style="font-size:14px"><strong>Tribunal Rejects Allegations</strong></span></p> <p><span style="font-size:14px">Turnrest had sought dismissal of the plea under Section 65, alleging that HDFC acted maliciously by pursuing parallel proceedings and releasing certain guarantors without disclosure. </span></p> <p><span style="font-size:14px">However, the tribunal held that the bank had clearly established the existence of debt and default, and that no evidence of collusion or malice was produced by the corporate debtor.</span></p> <p><span style="font-size:14px"><strong>CIRP Admitted</strong></span></p> <p><span style="font-size:14px">The tribunal noted that the release of guarantors under a separate commercial agreement did not affect the banks right to initiate CIRP.</span></p> <p><span style="font-size:14px">Concluding that Section 65 allegations were unsupported, the NCLT admitted Turnrest Resources into CIRP, imposed a moratorium, appointed Rajendra Devidas Puranik as Interim Resolution Professional, and directed HDFC Bank to deposit Rs 5 lakh towards initial insolvency costs.</span></p> <p><span style="font-size:14px"><em><strong>(KNN Bureau)</strong></em></span></p> 44374 https://knnindia.co.in/news/newsdetails/sectors/insolvency-plea-cant-be-dismissed-on-fraud-claims-without-proof-nclt-ahmedabad 2025-12-10 15:49:07 knnindia.co.in