December 12, 2025 : The National Company Law Tribunal, Kochi Bench, has reiterated that insolvency proceedings under the Insolvency and Bankruptcy Code, 2016 can be instituted only before the Bench exercising territorial jurisdiction over the place where the corporate debtor’s registered office is situated. The Tribunal clarified that jurisdiction cannot be determined by the location of the bank branch that issued recall or recovery notices.
The ruling was delivered by a coram comprising Judicial Member Vinay Goel while dealing with a preliminary objection on jurisdiction raised by a Kerala based corporate debtor. The Bench held that the issuance of recall notices or SARFAESI demand notices by a particular branch of a bank is legally inconsequential for deciding jurisdiction under Section 7 of the IBC.
The insolvency application had been filed by South Indian Bank Ltd against Nellai Plantations Pvt Ltd, whose registered office is located at Mundakayam in Kottayam district, Kerala. The bank had sanctioned cash credit and term loan facilities aggregating to ₹2.75 crore in December 2017, secured by hypothecation of standing crops and mortgage of immovable properties. Following persistent defaults, the loan accounts were classified as non performing assets in May 2025. A recall notice dated June 5, 2025 and a demand notice under the SARFAESI Act dated July 23, 2025 were subsequently issued by the Madurai branch of the bank, with outstanding dues quantified at ₹2.92 crore as on November 2025.
The corporate debtor opposed the insolvency petition on multiple grounds, contending that its plantations and secured assets were situated in Tamil Nadu and that the recall and demand notices had been issued from the Madurai branch. On this basis, it was argued that the Kochi Bench lacked territorial jurisdiction. The debtor also claimed that the petition was not maintainable due to the absence of a demand notice under Sections 8 and 9 of the IBC, alleging a violation of principles of natural justice.
Rejecting these objections, the Tribunal relied on Section 60(1) of the IBC to hold that jurisdiction for insolvency resolution and liquidation proceedings is determined solely by the location of the registered office of the corporate debtor. Since Nellai Plantations Pvt Ltd is registered in Kottayam, Kerala, the Kochi Bench was held to be the appropriate forum. The Tribunal categorically observed that the location of secured assets or mortgaged property, as well as the branch from which notices are issued, has no bearing on jurisdiction for proceedings under Section 7 of the Code.
On the issue of notice, the Bench clarified that the requirement of issuing a demand notice under Section 8 applies only to proceedings initiated by operational creditors under Section 9. In cases where insolvency is triggered by a financial creditor under Section 7, there is no statutory mandate to issue such a notice. The Tribunal held that the corporate debtor had misconceived the scheme of the Code by conflating the requirements applicable to financial and operational creditors.
Having found that the financial debt and default were duly established and that the claim exceeded the statutory threshold, the Tribunal admitted the insolvency petition. A moratorium under Section 14 of the Code was declared, Allen Bosco was appointed as the Interim Resolution Professional, and the bank was directed to deposit ₹2 lakh towards initial CIRP costs.
Cause Title: South Indian Bank Ltd vs Nellai Plantations Pvt Ltd
Case Number: CP(IBC)/38/KOB/2025
Coram: Judicial Member Vinay Goel
