NCLT Kolkata Reaffirms Recovery Certificate as Fresh Cause of Action Under IBC

The Kolkata Bench of the National Company Law Tribunal admitted a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 filed by Bank of India against Sunbeam Dealers Private Limited for default in repayment of financial debt exceeding ₹17.54 crore. 

The Tribunal held that the debt and default stood conclusively established through sanction documents, bank records, NeSLdata and recovery proceedings. 

Importantly, the Bench reiterated that a Recovery Certificate issued by the DRT constitutes a fresh cause of action for initiating CIRP, thereby extending the limitation period in terms of the Supreme Court rulings in Dena Bank and Kotak Mahindra Bank.