In the matter of GUNDLATHOTI READY MIX CEMENT INDUSTRY PRIVATE LIMITED

The instant Application CP (IB)/18/7/AMR/2026 (hereinafter referred to as the “CP 18/2026” or “Application”) was e-filed on 29.03.2026 and physically filed vide Diary No.579 dated 01.04.2026 by IFCI Venture Capital Funds Limited (hereinafter referred to as the “Financial Creditor” or “Applicant” or “IFCIVCFL”) under Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the ‘IBC’ or ‘Code’) read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (hereinafter referred to as the “IB Rules”) seeking initiation of the Corporate Insolvency Resolution Process (hereinafter referred to as the ‘CIRP’) against

Gundlathoti Ready Mix Cement Industry Private Limited (hereinafter referred to as the “Corporate Debtor” or “Respondent”) against the default amount of Rs.1,47,69,875/- (Rupees One Crore Forty Seven Lakh Sixty Nine Thousand Eight Hundred Seventy Five Only) as on 31.03.2024.

2. The Registry vide communication dated 27.04.2026, raised certain defects/ objections and returned the Application to the Financial Creditor for compliance.

3. Pursuant to the above communication dated 27.04.2026 of the Registry, the Financial Creditor vide letter dated 10.06.2026 to the Registrar stated as under:

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4. The Registry vide communication dated 18.06.2026, again raised certain defects/ objections and returned the Application to the Financial Creditor for compliance.

5. Pursuant to the above communication dated 18.06.2026 of the Registry, the Financial Creditor vide letter dated 18.06.2026 to the Registrar stated as under:

6. Thereafter, the Financial Creditor e-filed the Application on 19.06.2026 and physically filed vide Diary No.1147 dated 06.07.2026. Thereafter, the Application was first listed on 15.07.2026.

7. The registered office of the Corporate Debtor is situated at Door No. 2-204, Annavaram Village, Guntur, Rompucherla Mandal, Andhra Pradesh-522603. Therefore, the territorial jurisdiction lies with this Adjudicating Authority.

8. Facts of the case as submitted by the Counsel for the Financial Creditor during the course of today’s hearing and stated in its pleadings are as under:

(i) The registered office of the Financial Creditor is at IFCI Tower, 61 Nehru Place, New Delhi-110019. The Corporate Debtor is a Company engaged in the business of manufacturing and supplying ready mix concrete.

(ii) As per Part-IV of Form-1 of the Application, the total amount claimed to be in default and the date on which the default occurred is Rs.1,47,69,875/- (as on 31.03.2024) are shown below:

xxxxx xxxxx (iii) The Corporate Debtor approached the Financial Creditor seeking financial assistance to establish a ready mix concrete manufacturing plant with a proposed installed capacity of approximately 48,000 cubic meters per annum and the Financial Creditor agreed to extend the financial assistance to the Corporate Debtor through investment in Optionally Convertible Debentures (hereinafter referred to as the ‘OCDs’) vide Investment Agreement dated 14.03.2018 executed between the Financial Creditor, Corporate Debtor and Promoters along with recorded rights and obligations of the parties, framework under which Financial Creditor would provide financial assistance. Pursuant to the above, the Corporate Debtor issued 2,13,000 OCDs (Face Value of Rs.100) with coupon rate of 8% p.a. (revised to 6% as per the Modification of Operation of Guidelines for Financial Assistance to schemes of VCF-SC Entrepreneurs (2021-22 to 2025-26) dated 28.10.2022 vide File No. 14020/07/2020-SCD-IV (E.O. 35959 issued by Ministry of Social Justice & Empowerment, Department of Social Justice & Empowerment) in favour of the Financial Creditor.

(iv) Further, as per the Investment agreement, the OCDs issued to the Financial Creditor were to be redeemed through a structured buyback and redemption mechanism, whereby the promotors of the Corporate Debtor were obligated to buy back the OCDs in accordance with a defined repayment schedule i.e. periodic redemption through quarterly instalments beginning from 31.03.2019 and continuing till 31.03.2024 along with applicable coupon interest. Pursuant to the above, the Financial creditor also executed the Assignment Agreement dated 14.03.2018 and Deed of Guarantee dated 14.03.2018 executed by the Personal Guarantor in favour of the Financial Creditor. On the same date i.e. 14.03.2018, the Financial Creditor also executed the Declaration and Undertaking, Pledge Agreement, and Deed of Undertaking for non-disposal of shares & meeting shortfall by promotors.

(v) Accordingly, instalments became due on 31.03.2019, 30.06.2019, 30.09.2019, 31.12.2019, 31.03.2020, 30.06.2020, 30.09.2020, 31.12.2020, 31.03.2021, 30.06.2021, 30.09.2021, 31.12.2021, 31.03.2022, 30.06.2022, 30.09.2022, 31.12.2022, 31.03.2023, 30.06.2023, 30.09.2023, 31.12.2023 and finally on 31.03.2024. The Corporate Debtor failed to make payment of instalment, which fell due on 30.09.2020 and remained in default in remaining instalments.

(vi) Despite repeated reminders, the Corporate Debtor has not made any payment towards redemption of OCDs. The repayment schedule contemplated periodic obligations and each failure to honour the instalment due on the specified date constituted a default under the agreement. As per Article XI, clause (a) of the Agreement, two consecutive defaults at any stage of payment of coupon and/ or redemption/ buyback of OCDs as per the repayment schedule constitute an event of default. The clause 2.3 of Article II of the Agreement provides the repayment schedule for redemption of OCDs.

(vii) Certain instalments fell due on period covered under the Section 10A of the Code i.e. from 25.03.2020 to 25.03.2021, but the present Application is seeking default, which occurred subsequent to the Section 10A period and accordingly the date of default is 30.06.2021 i.e. the instalment falling after Section 10A period. The Hon'ble NCLAT in the matter of SREI Equipment Finance Ltd. v. R.S. Kamthe Infrastructure Developers Pvt. Ltd., Company Appeal (AT) (Ins.) No. 116 of 2024, decided on 28.01.2026, has categorically held that where the financial creditor bases its claim on defaults, which occurred subsequent to the Section 10A period, the application under Section 7 of the Code cannot be rejected on the ground that earlier defaults occurred during the Section 10A period, provided the application is confined to such subsequent defaults. The relevant extract of the order dated 28.01.2026 is as follows:

“11. The above judgments clearly support the submissions of the appellant that when the Section 7 application is based on default committed subsequent to Section 10A period and the amount claimed subsequent to Section 10A period is well beyond threshold, application cannot be rejected on the ground that it is barred by Section 10A application. We only clarify that Section 7 application filed by the appellant has to confine to the default committed subsequent to Section 10A period.” (viii) The Corporate Debtor failed to redeem the OCDs falling due after the Section 10A period i.e. from 31.03.2021 to 31.03.2024, comprising 13 quarterly instalments of 10,143 OCDs each, aggregating to a principal amount of Rs. 1,47,69,875/- i.e. principal amount of Rs. 1,31,85,900/- along with coupon interest Rs.15,83,975/-. The Financial Creditor issued recall notice dated 02.07.2024 and a demand notice dated 13.09.2024 to the Corporate Debtor at the registered address of the Corporate Debtor and Corporate Debtor failed to clear the outstanding dues.

(ix) As per records of the Financial Creditor, the outstanding liability of the Corporate Debtor as on 31.03.2026 is Rs.3,02,80,733.50 comprising Rs.2,13,00,000/- towards the principal and Rs.89,80,733.50 towards accrued interest and the Corporate Debtor continues to remain liable for the aforesaid amount together with future interest and charges in accordance with the terms of the agreement.

(x) The financial assistance extended by the Financial Creditor through subscription of the OCDs constitute a financial debt within the meaning of section 5(8) of the Code and the amount in default is far in excess of the minimum threshold prescribed under Section 4 of the Code.

9. During the hearing dated 15.07.2026, it was observed that the Financial Creditor served the notice on the Corporate Debtor on 29.03.2026 to the registered e-mail id as appearing in the master data of the Corporate Debtor, but the same was not be enclosed with Application.

10. During the next hearing dated 28.07.2026, in the absence of such proof of service, this Adjudicating Authority deemed it appropriate to issue notice to the Corporate Debtor and the Registry was directed to issue notice to the Corporate Debtor through Speed Post by informing the next date of hearing and the Corporate Debtor was granted one week time to file its Counter, and posted the matter to 17.08.2026, on which date, the Counsel for the Corporate Debtor sought a copy of this Application and one week time thereafter to file the Vakalat and reply.

11. During the next hearing dated 04.09.2026, it was observed that page nos.36 and 90 of the Application are missing from the DMS portal and page no.90 is also missing from the hard copy. The Financial Creditor sought a week’s time to rectify the above, and the Corporate Debtor also sought time to file the Counter. Time as prayed for was granted and the matter was posted to today for further consideration.

12. Pursuant to the order dated 04.09.2026, the Corporate Debtor vide Diary No. 1732 dated 10.09.2026 filed the Counter, wherein it contended that there is no financial debt, which is in default to the present Financial

Creditor, IFCIVCFL and therefore, the present Application is not maintainable at the threshold and is liable to be dismissed in limine.

(i) As per the Investment Agreement dated 14.03.2018, the Applicant floated a Venture Capital Fund in name of Venture Capital Fund for Schedule Castes (hereinafter referred to as the “VCF-SC”) under the scheme of the Ministry of Social Justice and Empowerment, Department of Social Justice and Empowerment to promote entrepreneurship in the Scheduled Castes. The VCF-SC has been set up as a trust fund under registered trust deed and is also registered with the Securities and Exchange Board of India (hereinafter referred to as the “SEBI”).

(ii) The IFCIVCFL, as the settlor, entrusted IL&FS Trust Company Limited (hereinafter referred to as the "IL&FS") to act as the trustee. IL&FS as the trustee has appointed IFCIVCFL as the Investment Manager under the Investment Management Agreement in respect of VCF-SC for managing the investments and providing administrative services. The aforesaid Investment Agreement dated 14.03.2018 was entered by IFCIVCFL in its capacity as the Investment Manager and not as the Debenture Holder or Debenture Trustee. The OCDs were issued in the name of VCF-SC by the Corporate Debtor, for which IL&FS acted as the Debenture Trustee.

(iii) Upon the creation and registration of the VCF-SC and the consequent transfer of the fund corpus, the role of IFCIVCFL as the settlor stood exhausted, thereby rendering IFCIVCFL functus officio qua the trust property.

(iv) Under the Indian Trusts Act, 1882, the legal ownership and title to the trust assets vest exclusively in the Trustee, i.e., IL&FS. The OCDs in question stand issued by the Corporate Debtor strictly in the name of VCF-SC and are administered under the regulatory and contractual oversight of the Debenture Trustee, i.e., IL&FS.

(v) An Investment Manager holds neither proprietary interest nor legal title in the trust assets and can under no canon of law be equated with or substituted for either the OCD holder, VCF-SC or the OCD Trustee IL&FS. Consequently, the Applicant has no independent legal right to assert ownership over the debentures or maintain the present proceedings against the Corporate Debtor.

(vi) The present Application is liable to be dismissed in limine under Section 7(5)(b) of the Code for lack of locus standi. Under Section 5(7) a "Financial Creditor" must be the person to whom the financial debt is legally owed or to whom such debt has been legally assigned.

(vii) The Applicant is merely an "Investment Manager" under Regulation 2(1)(q) of the SEBI (Alternate Investment Fund) Regulations, appointed by the Trustee under an Investment Management Agreement to manage and provide administrative services. A contractual service manager possesses no legal title, beneficial ownership or actionable claim in the trust assets and cannot sue in its own name. The debt is not legally owed to the Applicant under Section 5(7) of the Code and the defect goes to the root of jurisdiction rendering the Application an incurable nullity.

(viii) The Applicant in Part I of Form I of the Application is an independent company having its own corporate persona and the OCDs on record were not issued in the name of the Applicant herein, but under the name of VCF-SC.

(ix) The Applicant is only appointed as an investment manager by the trustee, the right to sue or file any Application will be on the Debenture Trustee, but not the Investment Manager, who was merely appointed to manage, invest and provide administrative services to the Debenture Trustee.

(x) Under Section 7(1) of the IBC, an application for initiating CIRP against a Corporate Debtor can be filed strictly by a financial creditor either by itself or jointly with other financial creditors or by "any other person on behalf of the financial creditor as may be notified by the Central Government". This statutory filter restricts representational filings exclusively to classes of persons specifically recognised and notified by the Central Government. In the present case, the Applicant is not the Financial Creditor in its own right.

(xi) The Applicant also fails to qualify as an "any other person as notified by the Central Government" under Section 7(1) of the Code. The Ministry of Corporate Affairs, vide Notification S.O. 1091(E) dated 27.02.2019, has notified only four specific categories entitled to file on behalf of a financial creditor: (i) a guardian (ii) an executor or administrator of an estate (iii) a trustee (including a debenture trustee) and (iv) a person duly authorized by the Board of Directors of a company. An "Investment Manager" will not fall under any of the above categories of persons.

(xii) Consequently, the Applicant has no statutory competence to initiate CIRP on behalf of the trustee, rendering the Application an incurable nullity for absolute want of authority under Section 7(1) of IBC.

(xiii) The Applicant's reliance on the balance sheets of the Corporate Debtor for seeking extension of limitation under Section 18 of the Limitation Act, 1963 is fundamentally misconceived and legally unsustainable. An acknowledgement under Section 18 does not confer title, create a fresh cause of action or cure an inherent defect of locus standi, it merely extends the period of limitation for an entity. Mere accounting entries in the books of account of the Corporate Debtor are maintained strictly for statutory reporting under the Companies Act, 2013 and cannot alter the legal nature of the underlying transaction or vest substantive rights of a "Financial Creditor" in an unnotified third-party entity.

(xiv) The mandatory statutory conditions precedent prescribed under Section 5(7), Section 5(8) and Section 7(1) of the Code override mere bookkeeping entries. In the total absence of any debt legally owed to or disbursed by the Applicant, the question of extending limitation does not arise rendering the Application liable to be rejected in limine.

(xv) Under Section 5(8) of the IBC, the foundational prerequisite to constitute a "financial debt" is an actual disbursement of funds against the consideration for the time value of money. A perusal of the bank statements and transactional documents placed on record by the Applicant demonstrates that the subscription funds were disbursed exclusively from the bank account of VCF-SC and not a single rupee was disbursed from the bank account of the IFCIVCFL, thereby disentitling the Applicant from claiming the status of a "Financial Creditor" under Section 5(7) read with Section 5(8) of the Code.

(xvi) Under the statutory scheme of Section 7 of the IBC, the existence of a legally enforceable debt due to the Applicant is a condition precedent to establish any default. In the total absence of any debt owed to the Applicant, the question of default does not arise, rendering the present Application fundamentally non maintainable and liable to be dismissed in limine under Section 7(5)(b) of the IBC.

(xvii) The perusal of the Investment Agreement dated 14.03.2018 reveals that it confines the role of the Applicant strictly to that of an administrative Investment Manager to manage, invest and provide administrative services to the Fund and confers no right or authority whatsoever to institute insolvency proceedings under Section 7 of the Code. While the Agreement records that the OCDs were subscribed under the trust fund VCF-SC, the contractual liberty given to the Applicant under any clause or Article of the Investment Agreement is merely to issue a notice of recall or demand in its Investment Manager capacity. Such contractual provisions do not vest proprietary title to the debt, privity of contract as the debenture holder or the legal right to initiate judicial proceedings, which substantive rights remain exclusively with the Trustee IL&FS. Therefore, the Investment Agreement does not confer any statutory competence or locus standi upon the Applicant to institute the present Application under the Code (xviii) The Applicant cannot unilaterally characterize the OCDs as a crystallized "financial debt" under Section 5(8) of the Code. The OCDs were issued as hybrid, equity-linked venture investments under an Alternative Investment Fund structure, carrying intrinsic conversion options rather than an unconditional commercial borrowing, the crystallization, whereof depends upon the strict fulfilment of contractual conversion milestones, valuation mechanisms and redemption covenants. Being a mere third party Investment Manager holding neither the debenture certificates nor privity of contract as the debenture holder or trustee, the Applicant has no legal authority to assert that these hybrid equity instruments constitute a financial debt.

13. During the course of hearing today, it is submitted by the Financial Creditor that page no.36 belongs to non-judicial stamp paper in respect of verifying affidavit and there is no matter in the page no.90 and the same was due to wrong pagination, therefore these can be excluded from the Application.

14. During the course of today’s hearing, the Corporate Debtor, relying upon his Counter Affidavit, opposes the admission of the present Application, and contend that the Financial Creditor lacks the requisite locus standi to maintain the proceedings under Section 7 of the IBC. It is submitted that, under the Investment Agreement dated 14.03.2018, the OCDs were issued by the Corporate Debtor in the name of the VCF-SC, while IL&FS acted as the Debenture Trustee and IFCIVCFL entered into the Investment Agreement solely in its capacity as Investment Manager and not as Debenture Holder or Debenture Trustee. The Corporate Debtor, referring to the bank statement at page 22 of the Counter Affidavit, contend that the disbursements were made from the account of the VCF-SC to the Corporate Debtor and not from IFCIVCFL. Hence, in terms of Section 5(7) of the Code, the IFCIVCFL does not qualify as a “Financial Creditor” in respect of the alleged debt and, consequently, has no locus standi to institute the present Application under Section 7 of the Code. Per contra, it is submitted by the Financial Creditor that as per ‘Article XII: Rights in the event of Default’ of the Investment Agreement dated 14.03.2018, at page 83 of the Application, during the currency of the assistance under VCF-SC, if any event of default or potential event of the default as mentioned aforesaid has occurred, IFCIVCFL has the right to take appropriate action against the Corporate Debtor with respect to the said financial assistance and hence, the IFCIVCF has the locus standi to file the present Application for initiation of the CIRP against the Corporate Debtor.

15. We have heard the Counsels for the Financial Creditor and Corporate Debtor also perused the records carefully.

16. Before going to analysis, we need to go through the details of the agreement as follows:

(i) The Investment Agreement was executed on 14.03.2018 between Corporate Debtor, Promotors (Srinivasa Rao Gundlatoti alias Srinivas Rao Gundlathoti and Ashok Gullathoti) and Financial Creditor. The relevant extract of the Agreement is reproduced below:

(ii) The Financial Creditor herein floated a Venture Capital Fund in the name of VCF-SC, which was set up as a Trust Fund under which the IL&FS and Financial Creditor herein had been appointed as the Trustee and Investment Manager respectively. The relevant extracts of the Agreement is reproduced below:

(iii) As per Schedule II enclosed with the Agreement, the project cost is Rs.318 lakh to be financed by promoters contribution of 104 lakh and assistance under VCF-SC in equity of Rs.1 lakh and in OCDS of Rs.213 lakh. The relevant extract of the Agreement is reproduced below:

(iv) Under the Agreement, the Financial Creditor has agreed to finance Rs.2.14 crore (OCD – Rs.2.13 crore and Equity of Rs.0.01 crore) out of total project cost of Rs.3.18 crore. The relevant extracts of the Agreement is reproduced below:

(v) As per the terms of the Agreement, the Financial Creditor under VCF-SC will subscribe to 2,13,000 OCDs aggregating to Rs.2.13 crore in the Corporate Debtor. The OCDs shall carry coupon rate of 8% per annum payable on quarterly basis to VCF-SC starting from the date of disbursement. In case of delay in payment of coupon rate and/ or redemption of OCDs, there shall be default coupon rate @ 12% per annum chargeable for delayed period of payment. The Corporate Debtor/ Promoters shall redeem/ buy back up to 1,72,431 OCDs as per the redemption Schedule. The OCDs bought back by the Promoters shall automatically stand converted into interest free unsecured loan or equity share capital at the option of the Promoters and remain in the Corporate Debtor Company till the Financial Creditor under VCF-SC holds any OCD/ Equity in the Corporate Debtor. The outstanding OCDs as on 31.03.2023 shall be converted into equity shares at the sole discretion of the Financial Creditor. The above conversion of OCDs may take place after giving an opportunity to the Corporate Debtor/ Promoters to redeem/ buy back as per the redemption buyback schedule. The relevant extracts of the Agreement are reproduced below:

(vi) The events of default inter alia, include two consecutive defaults at any stage of payment of coupon and/ or redemption/ buy back of OCDs. The relevant extract of the Agreement is reproduced below:

(vii) In the event of default, the Financial Creditor has various rights including the right to take any appropriate legal actions. The relevant extract of the Agreement is reproduced below:

(viii) In the event of default by the Corporate Debtor, Clause 9.3 of Article IX of the Investment Agreement expressly provides that the IFCIVCFL shall be at liberty to recall the entire financial assistance, whereupon the Corporate Debtor and the Promoters shall be liable to repay the entire financial assistance together with interest at the rate of 12% per annum. Further, Article XIII of the Investment Agreement provides that, upon breach of the terms and conditions thereof, IFCI Venture shall have the right to recall the financial assistance, and the Corporate Debtor and the Promoters shall be liable to repay the financial assistance together with the stipulated default coupon of 12% per annum on the OCDs. The relevant extracts of the Agreement are as follows:

(ix) The coupon rate of 8% p.a. was revised to 6% as per the Modification of Operation of Guidelines for Financial Assistance to schemes of VCF-SC Entrepreneurs (2021-22 to 2025-26) dated 28.10.2022 vide File No. 14020/07/2020-SCD-IV (E.O. 35959 issued by Ministry of Social Justice & Empowerment, Department of Social Justice & Empowerment) in favour of the Financial Creditor

17. The first issue for consideration before us is "Whether the present Application is filed within the period of limitation"

(i) The Financial Creditor has filed the Application based on the date of default as 30.06.2021 as mentioned in Part IV of the Form 1 of the Application, which is the first actionable default after expiry of the Section 10A period.

(ii) Accordingly, the date of default has been stated by the Financial Creditor as 30.06.2021, according to which, the limitation would expire on 29.06.2024.

(iii) It is noted that the Balance Sheet as at 31.03.2023 of the Corporate Debtor (page 167 of the Application) reflects the outstanding borrowing against the OCDs at the option of the Financial Creditor. The relevant extracts of the above balance sheet are reproduced below:

(iv) The Hon’ble Supreme Court vide judgment dated 22.10.2024 in the matter of Vidyasagar Prasad vs. UCO Bank & Anr., Civil Appeal No. 1031 of 2022, observed entry made in the balance sheet amounts to an acknowledgement of the liability. The relevant extract of the aforesaid judgment is reproduced below:

(v) Hon’ble NCLAT, Principal Bench, New Delhi in its recent order dated 03.02.2026 in Raghav Butola vs. Jammu and Kashmir Bank (Company Appeal (AT) (Insolvency) No. 240 of 2026), has also affirmed that acknowledgement of the liability in the Balance sheet extends the limitation period under Section 18 of the Limitation Act, 1963. The relevant extract of the aforesaid judgment is reproduced below:

(vi) In view of the above acknowledgement of liability in the Balance Sheet of the Corporate Debtor within the limitation period, fresh limitation period of three years will start extending the limitation period up to 31.03.2026.

(vii) Since the present Application has been e-filed on 29.03.2026, we are of the considered view that it is well within the period of limitation.

18. The Corporate Debtor has contended that the subscription funds were disbursed from the bank account of VCF-SC and therefore, the Applicant IFCIVCFL, is not a "Financial Creditor" under Section 5(7) read with Section 5(8) of the Code and the requisite locus standi to maintain the proceedings under Section 7 of the IBC. It is further submitted that, under the Investment Agreement dated 14.03.2018, the VCF-SC was constituted as a trust, with IL&FS acting as the Trustee and IFCIVCFL acting only as the Investment Manager. Therefore, the Applicant has no locus to file the present Application. Therefore, the next issue for consideration before us “Whether the IFCIVCFL has a right to file the present Application”.

(i) As per clause 1.1 of the Agreement, the Corporate Debtor has approached the Financial Creditor herein to finance the project of the Corporate Debtor and Financial Creditor under the VCF-SC has agreed to finance the assistance.

(ii) As per clause 2.1 of the Agreement, the Financial Creditor under VCF-SC subscribed the aforesaid OCDs as per the terms and conditions of the Agreement.

(iii) Pursuant to the aforesaid Investment Agreement, the following Agreements were executed by the Corporate Debtor and Promoters:

a. The Corporate Debtor and Promoters of the Corporate Debtor executed Assignment Agreement dated 14.03.2018 assigning the rights under the Lease Deed dated 05.03.2018 in favour of the Financial Creditor herein. The relevant extracts of the Assignment Agreement is reproduced below:

b. The Promoters of the Corporate Debtor also executed the Deed of Guarantee dated 14.03.2018 in favour of the Financial Creditor herein. The relevant extracts of the Deed of Guarantee is reproduced below:

xxxxx c. The Corporate Debtor executed the Deed of Hypothecation dated 14.03.2018 in favour of the Financial Creditor herein. The relevant extracts is reproduced below:

d. The Promoter of the Corporate Debtor executed the Declaration and Undertaking for Mortgage by deposit of Title Deeds dated 14.03.2018 in favour of the Financial Creditor herein. The relevant extracts is reproduced below:

e. The Agreement for Pledge of Shares dated 14.03.2018 was executed by the Promoters of the Corporate Debtor. The relevant extracts is reproduced below:

(iv) Pursuant to the Investment Agreement and Deed of Hypothecation executed by the Corporate Debtor, the charge has been created in favour of the Financial Creditor herein on 14.03.2018 with the Registrar of Companies, which is reflected in the Master Data of the Corporate Debtor, the relevant extract of which is reproduced below:

(v) Based on the above facts and circumstances, the VCF-SC has disbursed the amount to the Corporate Debtor for subscription of OCDs.

(vi) As per clause (a) of Article XI of the Agreement, two consecutive defaults at any stage of payment of coupon and/ or redemption/ buy back of OCDs would amount to event of default.

(vii) As per clause (b) of Article XII of the Agreement, the Corporate Debtor has agreed that the Financial Creditor herein has right to take appropriate legal actions.

(viii) It is an admitted fact by the Corporate Debtor that the disbursement under the Agreement has been availed by it.

(ix) After executing the Assignment Agreement, Deed of Guarantee, Deed of Hypothecation, Declaration & Undertaking and Pledge Agreement and also availing the loan based on the Agreement dated 14.03.2018, wherein they have agreed that the Financial Creditor herein shall have right to take appropriate legal actions in the event of default, the Corporate Debtor would be estopped from taking another stand that the Financial Creditor herein cannot file the Section 7 Application, and the same would not be a valid ground based on the rule of estoppel.

(x) After default by the Corporate Debtor, the Financial Creditor issued the recall notice dated 02.07.2024, the relevant extract of which is reproduced below:

(xi) Subsequent to the recall notice, the Financial Creditor issued the default notice dated 13.09.2024, the relevant extract of which is reproduced below:

(xii) The Corporate Debtor has failed to make the payment of the debt and any contention raised by the Corporate Debtor regarding the existence of debt and default have not been placed on record by the Corporate Debtor.

(xiii) The Corporate Debtor has also acknowledged the debt due to the Financial Creditor herein in its Audited Financial Statements for the Financial Years 2021-22 and 2022-23.

(xiv) In the present case, the record establishes that the Corporate Debtor failed to adhere to the agreed redemption schedule and committed continuing defaults in repayment of the OCDs. Consequently, the Financial Creditor exercised its contractual right of recall by issuing the Recall Notice dated 02.07.2024, followed by the Demand Notice dated 13.09.2024, calling upon the Corporate Debtor to discharge the outstanding financial liability. The record further shows that, despite such recall and demand, the Corporate Debtor failed to discharge the outstanding dues..

(xv) Thus, a conjoint reading of Clauses 2.1 and 2.3, Clause 9.3 of Article IX, Article XI, Article XII and Article XIII of the Investment Agreement makes it evident that IFCIVCFL was vested with substantive contractual rights in respect of the financial assistance, including the right to recall the entire financial assistance upon default, demand repayment with the stipulated interest/default coupon, enforce the securities and take appropriate legal action. These provisions assume significance, while considering the objection raised by the Corporate Debtor as to the locus standi of IFCIVCFL to maintain the present Application under Section 7 of the Code. The Financial Creditor herein, therefore, cannot be regarded as a mere Investment Manager having only administrative or ministerial functions. The contractual documents expressly confer upon IFCIVCFL substantive and enforceable rights arising from the financial transaction, including the right to recall the entire financial assistance and to take appropriate legal action upon default. The exercise of such contractual rights by issuance of the Recall Notice and Demand Notice further demonstrates the nature and extent of the authority vested in the Financial Creditor herein ,under the contractual framework.

(xvi) In view of the foregoing discussion, we are of the considered view that the objection raised by the Corporate Debtor as to the locus standi of the Financial Creditor is devoid of merit. The contractual documents placed on record expressly confer upon IFCIVCFL the right to recall the financial assistance and to take appropriate legal action upon default. Accordingly, the Financial Creditor has the requisite authority to maintain the present Application under Section 7 of the Code.

19. The next issue for consideration before us is “Whether the Debt in the present Application comes under the definition of Financial Debt under section 5(8) of the Code.”

(i) As per Section 5(8) of the Code, ‘financial debt’ means a debt along with interest, if any, which is disbursed against the consideration for the time value of money and includes any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument. The relevant extract of the provision is reproduced below:

xxxxx (ii) In the present Application, the Financial Creditor financed Rs.2,13,00,000/- by way of subscription of 2,13,000 OCDs of Rs.100/- each and the Corporate Debtor/ Promotors agreed to redeem/ buyback the OCDs on quarterly basis along with coupon rate of 8% p.a. Out of 2,13,000 OCDs, the Corporate Debtor/ Promotors were to redeem/ buyback 1,72,431 OCDs on/ or before 31.03.2023 and the said OCDs brought back by the Promotors automatically converted into interest free unsecured loan or equity shares at the option of the promotors. The outstanding OCDs as on 31.03.2023 shall also be redeemed/ bought back by the Promotors, shall automatically get converted into interest free unsecured loan or equity shares at the option of the Promotors along with coupon rate of 8% p.a. on/ before 31.03.2024.

(iii) If the Promotors fails to redeem/ buyback the OCDs before 31.03.2024, outstanding OCDs as on 31.03.2023 shall be converted into the equity shares at the sole discretion of the Financial Creditor. In case of breach of any terms and condition of the investment agreement, the Financial Creditor has right to recall the financial assistance and the Corporate Debtor/ Promotors would be liable to pay the financial assistance along with default coupon of 12% p.a. on the OCDs.

(iv) For this, we referred to the judgement dated 10.01.2024 in the mater of “Santosh Kumar Vs. ASK Trusteeship Services Private Limited and Anr., Company Appeal (AT) (Ins.) No. 1575 of 2023” which relied on its old judgement dated 23.04.2019 “MAIF

Investments India Pte. Limited vs. Ind Bharath Energy (Utkal) Limited, Company Appeal (AT) (Ins.) No.597 of 2018” held that the OCDs are financial debt based on the clauses of the agreement.

(v) In the present case, the Article XIII gives the Financial Creditor right to recall the financial assistance along with coupon rate in case of breach of agreement. This implies that the present OCDs qualifies the definition of financial debt under section 5(8) of the Code.

20. The next issue for consideration before us “Whether the Application based on default date after the Section 10A period is maintainable, if the threshold limit after the Section 10A period crosses the threshold limit.”

(i) The first few redemptions of the OCDs was due on Section 10A period. However, the Financial Creditor filed this Application based on the default, which falls after the Section 10A period for the amount defaulted after Section 10A period. The Financial Creditor rightly relies on the Hon’ble NCLAT Judgment dated 28.01.2026 in the matter of SREI Equipment Finance Ltd. Vs. R.S. Kamthe Infrastructure Developers Pvt. Ltd., Company Appeal (AT) (Insolvency) No. 116 of 2024. The Hon’ble Appellate Tribunal held that when section 7 application is based on default committed subsequent to Section 10A and the amount claimed subsequent to Section 10A period is well beyond threshold, application cannot be rejected on the ground that it is barred by Section 10A application. The relevant extract of the judgement is reproduced below:

“11. The above judgments clearly support the submissions of the appellant that when the Section 7 application is based on default committed subsequent to Section 10A period and the amount claimed subsequent to Section 10A period is well beyond threshold, application cannot be rejected on the ground that it is barred by Section 10A application. We only clarify that Section 7 application filed by the appellant has to confine to the default committed subsequent to Section 10A period.” (ii) In the present case, since the Financial Creditor filed the Application for the default amount after the Section 10A period based on the default date after the Section 10A period, the Application is maintainable as default after the Section 10A period crosses the threshold limit.

21. The next issue for consideration before us is “Whether there is a financial debt and default in repayment thereof, when it became due and payable, which meets the minimum threshold limit of Rs. One crore as required under Section 4 of the IBC?”

(i) The Financial Creditor as per Part-IV of Form-1 of the Application has stated that the total amount in default as on 31.03.2024 amounts to Rs.1,47,69,875/-, and the outstanding liability of the Corporate Debtor as on 31.03.2026 stands at approximately Rs.3,02,80,733.50 comprising Rs.2,13,00,000 towards overdue principal and Rs.89,80,733.50 towards accrued interest.

(ii) Despite repeated reminders and issuance of recall notice dated 02.07.2024 and demand notice dated 13.09.2024, the Corporate Debtor failed to discharge the financial debt.

(iii) Further, the Corporate Debtor has also acknowledged the subsisting liability in its audited financial statements for the year ending 31.03.2023, which constitutes a valid acknowledgement.

(iv) The Corporate Debtor committed default in repayment of the above financial debt which is due and payable and the default continues to subsist, which is more than the threshold requirement of Rs. One Crore as required under Section 4 of the Code.

22. However, before admission of the Application, this Adjudicating Authority has to satisfy itself that the Application is complete and that no disciplinary proceedings are pending against the proposed Interim Resolution Professional (hereinafter referred to as the “IRP”). We have gone through the contents of the Application filed by the Financial Creditor and found the same to be complete. The Financial Creditor has proposed the name of Mr. Mannava Divakara Sarma, having Registration No. IBBI/IPA-001/IP-P01192/2018-2019/11917, as the IRP in the present matter. The written consent of the proposed IRP in Form-2 dated 29.03.2026 is placed at page 259 of the Application, wherein the proposed IRP has affirmed that he is eligible to be appointed as the Resolution Professional in respect of the Corporate Debtor and certified that no disciplinary proceedings are pending against him before the Board or the Indian Institute of Insolvency Professionals of ICAI. The copy of the Authorisation for Assignment in Form B is annexed at page 260(c) of the Application, which shows that his Authorisation was valid up to 31.12.2026. The relevant extract of the IBBI website is reproduced below:

23. As a sequel to the discussion above, the present Section 7 Application bearing CP (IB)/18/7/AMR/2026 filed by the Financial Creditor under section 7 of the IBC for initiating CIRP against the Corporate Debtor Gundlathoti Ready Mix Cement Industry Private Limited is hereby admitted and accordingly, the moratorium is declared in terms of Section 14 of the Code: (i) Moratorium under section 14(1) for prohibiting all of the following, namely: a. The institution of suits or continuation of pending suits or proceedings against the Corporate Debtor including execution of any judgement, decree or order in any court of law, tribunal, arbitration panel or other authority;

b. Transferring, encumbering, alienating or disposing of by the Corporate Debtor any of its assets or any legal right or beneficial interest therein;

c. Any action to foreclose, recover or enforce any security interest created by the Corporate Debtor in respect of its property including any action under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002;

d. The recovery of any property by an owner or lessor, where such property is occupied by or in the possession of the Corporate Debtor. (ii) It is hereby clarified that notwithstanding anything contained in any other law for the time being in force, a license, permit, registration, quota, concession, clearance or a similar grant or right given by the Central Government, State Government, local authority, sectoral regulator or any other authority constituted under any other law for the time being in force shall not be suspended or terminated on the grounds of insolvency, subject to the condition that there is no default in payment of current dues arising for the use or continuation of the license, permit, registration, quota, concession, clearances or a similar grant or right during the moratorium period; (iii) The supply of essential goods or services to the Corporate Debtor, as may be specified, shall not be terminated or suspended or interrupted during the moratorium period, except where such Corporate Debtor has not paid dues arising from such supply during the moratorium period or in such circumstances, as may be specified. (iv) The provisions of sub-section of section 14(1) shall not apply to such transactions, agreements or other arrangement, as may be notified by the Central Government in consultation with any financial sector regulator or any other authority; and also, to a surety in a contract of guarantee to a corporate debtor. (v) It is clarified that the provisions of Section 14(1) of the Code shall also apply, where the surety seeks to initiate or continue any action or proceedings against the Corporate Debtor pursuant to the Contract of Guarantee. (vi) The order of` moratorium shall have effect from the date of this order till the completion of the CIRP or until this Adjudicating Authority approves the resolution plan under sub-section (1) of Section 31 or passes an order for liquidation of the Corporate Debtor under Section 33 as the case may be.

24. We also appoint Mr. Mannava Divakara Sarma, bearing Registration No. IBBI/IPA-001/IP-P01192/2018-2019/11917 Email: mdsarma2003@yahoo.com having Address at 5-4-11, 2/3, Brodiepet, Guntur-522002, Andhra Pradesh, as IRP in the instant matter, with the following directions:

(i) The term of appointment of the aforesaid IRP shall be in accordance with the provisions of Section 16(5) of the Code;

(ii) The aforesaid IRP shall also submit an affidavit to this Adjudicating Authority within 7 days of this Order that he is eligible to be appointed as IRP under Regulation 3 of IBBI (Insolvency Resolution Process for Corporate Persons), Regulations, 2016;

(iii) The IRP shall make all requisite disclosures as per First Schedule under Regulation 7(2)(h) of the IBBI (Insolvency Professionals) Regulations, 2016 in the first meeting of the CoC;

(iv) In terms of Section 17 of the Code, from the date of this appointment, the powers of the Board of Directors shall stand suspended and the management of the affairs shall vest with the IRP and the officers and the managers of the Corporate Debtor shall report to the IRP, who shall be enjoined to exercise all the powers, as are vested with the IRP and strictly perform all the duties, as are enjoined on the IRP under Section 18 and other relevant provisions of the Code, including taking control and custody of the assets, over which the Corporate Debtor has ownership rights recorded in the balance sheet of the Corporate Debtor, etc. as provided in Section 18(1)(f) of the Code. The IRP is directed to prepare a complete list of the inventory of assets of the Corporate Debtor;

(v) The IRP shall strictly act in accordance with the Code, all the rules framed thereunder by the Board or the Central Government and in accordance with the Code of Conduct governing his profession and as an Insolvency Professional with high standards of ethics and moral;

(vi) The IRP shall cause a public announcement immediately (but not later than three days from the date of his appointment), in terms of Regulation 6 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 of the initiation of the CIRP read with Section13(1)(b) read with Section 15 of the Code calling for the submission of claims against Corporate Debtor;

(vii) The IRP/RP shall prepare the Audited Financial Statements as on date of the CIRP and shall submit before the CoC for consideration.

(viii) The IRP/RP shall also ensure that all the assets appearing in the Financial Statements on the CIRP date have been considered in the valuation report. The IRP/ RP shall send individual communication through post or electronic means along with a copy of public announcement to all the creditors as per last available books of accounts/ financial statements on the CIRP date of Corporate Debtor as prescribed under Regulation 6A of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.

(ix) The Corporate Debtor, its Directors, personnel and the persons associated with the management shall extend all cooperation to the IRP in managing the affairs of the Corporate Debtor as a going concern and extend all cooperation in accessing books and records as well as assets of the Corporate Debtor;

(x) The suspended Board of Directors is directed to give complete access to the books of accounts of the Corporate Debtor maintained under Section 128 of the Companies Act, 2013. In case, the books are maintained in the electronic mode, the suspended Board of Directors are to share with the IRP/RP all the information regarding maintaining the backup and regarding service provider kept under Rule 3(5) and Rule 3(6) of the Companies (Accounts) Rules, 2014 respectively as effective from 11.08.2022, especially the name of the service provider, the internet protocol of the service provider and its location, and also address of the location of the books of accounts maintained in the cloud. In case accounting software for maintaining the books of accounts is used by the Corporate Debtor, then IRP/RP is to check that the audit trail in the same is not disabled as required under the notification dated 24.03.2021 of the Ministry of Corporate Affairs. A reference is made to the provisions of Section 128(5) of the Companies Act, 2013, whereby every company should maintain its books of accounts for not less than eight financial years immediately preceding a financial year. Minutes and statutory records are the principal documents of the company that should be maintained and preserved since inception.

(xi) In view of the above mandatory provisions, the suspended directors of the board will ensure that the books of accounts for the eight previous financial years preceding the date of this order be made available to the IRP/RP within 15 days of the initiation of the CIRP order. The statutory auditor is also directed to share the records maintained by him in the course of the audit of the accounts of the Corporate Debtor for the period of three years prior to the date of initiation of this CIRP order within the same period of 15 days.

(xii) In case of any non-cooperation by the suspended Board of Directors or the statutory auditors, the IRP/RP may take the help of the police authorities to enforce this order. The concerned police authorities are directed to extend help to the IRP/RP in implementing this order for retrieval of relevant information from the systems of the Corporate Debtor. The suspended Board of Directors is also directed to hand over all user IDs and passwords relating to the Corporate Debtor, particularly for government portals, for various compliances. The IRP is also directed to make a specific mention of non-compliance, if any, in this regard in his status report filed before this Adjudicating Authority immediately after a month of the initiation of the CIRP.

(xiii) The IRP/RP is directed to approach the government departments, banks, corporate bodies and other entities with request for information/documents available with those authorities/ institutions/ others pertaining to the Corporate Debtor, which would be relevant in the CIRP. The government departments, banks, corporate bodies and other entities are directed to render the necessary information and cooperation to the IRP/RP to enable him to conduct the CIRP as per law.

(xiv) The IRP shall, after collation of all the claims received against the Corporate Debtor and the determination of the operational position of the Corporate Debtor constitute a Committee of Creditors and shall file a report, certifying constitution of the Committee to this Adjudicating Authority within two days of verification of claims received under Regulation 12(1) of the CIRP Regulations, and shall convene first meeting of the Committee within seven days of filing the report of constitution of the Committee.

(xv) The IRP shall also serve a copy of this order to all relevant statutory departments such as Income Tax, GST (Centre and State), Provident Fund, ESI etc.; Regulators; and trade unions/ employee associations to inform them about the commencement of CIRP.

(xvi) The IRP is directed to file a progress report every month to this Adjudicating Authority.

25. The Financial Creditor is directed to deposit Rs.5,00,000/- (Rupees Five Lakhs Only) with the IRP to meet out the expenses to perform the functions assigned to him in accordance with Regulation 6 of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. The amount, however, will be subject to adjustment by the Committee of Creditors as to be duly accounted for by IRP and shall be paid back to the Financial Creditor.

26. A copy of this Order shall immediately be communicated to the Financial Creditor, the Corporate Debtor, IBBI, and the IRP named above by the Court Officer/ Registry of this Adjudicating Authority.

Accordingly, CP (IB)/18/7/AMR/2026 stands admitted.

Sd/- Sd/- (UMESH KUMAR SHUKLA) (KISHORE VEMULAPALLI) MEMBER (TECHNICAL) MEMBER (JUDICIAL)

Krishna/ RSN