NCLT admits Union Bank of India's IBC plea against Matoshri Laxmi Sugar
This story was originally published at 19:47 IST on 17 July 2025
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NEW DELHI - The Mumbai bench of the National Company Law Tribunal on Thursday admitted a petition by Union Bank of India to start insolvency proceedings against Matoshri Laxmi Sugar Co-Generation Industries Ltd. for an unpaid amount of INR 560.09 million. The tribunal appointed Ram Singh Setia as the interim resolution professional of the debt-ridden company to carry out the functions as per the Insolvency and Bankruptcy Code, 2016.
The tribunal said it was satisfied that Matoshri Laxmi Sugar had committed a "default in repayment of financial debt" to Union Bank. As a consequence thereof, moratorium under Section 14 of Insolvency and Bankruptcy Code, 2016 is declared..." said the tribunal.
Matoshri Laxmi Sugar is a company engaged in the business of sugar production, power cogeneration and introducing farmers to the modern agricultural technology and providing employment in the rural area. The company had from time-to-time availed various credit facilities under a consortium arrangement consisting of Union Bank of India, Punjab National Bank and Bank of Baroda, wherein Punjab National Bank was the lead bank.
After availing the credit facilities, Matoshri Laxmi Sugar had started defaulting on loan repayments. The initial default in respect of the credit facilities was when the account of Matoshri Laxmi Sugar was declared as a non-performing asset in 2017. Thereafter, Union Bank issued a demand notice in 2019 seeking the outstanding dues and even offered Matoshri Laxmi Sugar to avail the "Centenary Settlement Scheme for Doubtful and Loss Assets". However, Matoshri Laxmi Sugar neither paid the amount demanded nor availed of the scheme offered by the financial creditor. Consequently, the bank moved the tribunal to start insolvency proceedings.
On Thursday, the shares of Union Bank of India ended 1.4% lower at INR 146.31 on the National Stock Exchange. End
Reported by Surya Tripathi
Edited by Vandana Hingorani
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