The Calcutta High Court’s Commercial Division, under Justice Krishna Rao, has granted interim relief to Mani Square Limited and another petitioner in their dispute with Piramal Finance Limited over loan repayment and recall notices. The order was pronounced on 19 August 2025, following hearings concluded on 12 August 2025.
Background of the Dispute
The Mani Group, engaged in real estate, hospitality, and edu-health sectors, had partnered in the development of the iconic project “The 42” at Chowringhee Road, Kolkata. To finance this project, the group secured a loan of ₹120 crore from Piramal Finance in 2018, out of which ₹95.50 crore was disbursed upfront.
In June 2022, a second loan of ₹106 crore was sanctioned by Piramal Finance, mainly to service the earlier debt. However, disputes arose when the lender issued multiple recall notices in 2025, demanding repayment of large sums, including a total claim of over ₹92 crore. Mani Group challenged the legality of these notices, arguing that the loan agreements did not provide for such recalls and that they had already paid instalments with penal interest.
Senior Advocate Jishnu Saha, representing the petitioners, argued that Mani Group had consistently serviced loans and that no default qualified as a Non-Performing Asset (NPA) under RBI guidelines. He claimed the recall notices were part of a conspiracy with another developer group.
On the other hand, Senior Advocate Sudipto Sarkar, representing Piramal Finance, contended that the borrowers were habitual defaulters. He emphasized that Piramal Finance had already initiated proceedings under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, making the civil suit non-maintainable. He also relied on contractual clauses giving the lender discretion to recall loans.
Senior Advocate S.N. Mookherjee, representing one of the respondents, submitted that the notices were improperly issued by the security trustee, which lacked the authority to recall loans under the agreement. He stressed that the agreements only permitted levy of penal interest, not loan recall.
Justice Krishna Rao noted that Piramal Finance had filed an application under Section 7 of the IBC, but it had not yet been admitted by the National Company Law Tribunal (NCLT). Therefore, the High Court retained jurisdiction to hear the matter.
The Court restrained Piramal Finance and its agents from giving effect to or enforcing the recall notices dated 28 May, 8 June, 13 June, and 16 June 2025 until 17 September 2025. However, it clarified that the NCLT remains free to decide on the admission of Piramal’s IBC application.
Case Title: Mani Square Limited & Anr. vs. Piramal Finance Limited & Ors.
Case No.: G.A. (COM) No. 1 of 2025 in C.S. (COM) No. 93 of 2025
