# In the matter of Dhanalakshmi Paper Mills Pvt. Ltd. (R. Ramaswamy Vs. Dhanalakshmi Paper Mills Pvt. Ltd.) MA-200-IB-2018 in CP-722-IB-2017

> NCLT judgment dated 2018-07-31. Citation: TCN-2018-NCLT-01036. The case involves an application (MA/200/IB/2018) filed in CP/722/IB/2017 by a promoter of…

- **Court:** NCLT
- **Order date:** 31 Jul 2018
- **Citation:** TCN-2018-NCLT-01036
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/dhanalakshmi-paper-mills-pvt-ltd-r-ramaswamy-vs-dhanalakshmi-paper-mills-pvt-ltd-e0feceec

## Summary

### Background

The case involves an application (MA/200/IB/2018) filed in CP/722/IB/2017 by a promoter of Dhanalakshmi Paper Mills Pvt. Ltd. (Corporate Debtor) against Canara Bank. The applicant sought a declaration that no financial debt is due to Canara Bank and requested the bank's exclusion from the list of financial creditors. The applicant also sought an injunction restraining Canara Bank from being recognized as a member of the Committee of Creditors (CoC). The applicant contended that Canara Bank had offered a One Time Settlement (OTS) in July 2017, which required a payment of Rs.2,26,27,673/-, and the bank would renew its limit. The applicant claimed to have made an excess payment of Rs.2,35,00,000/- but the bank did not account for it as OTS and failed to renew the limit.

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## Facts

R. Ramaswamy, the applicant and a promoter of Dhanalakshmi Paper Mills Pvt. Ltd. (Corporate Debtor), filed an application (MA/200/IB/2018) in CP/722/IB/2017 against Canara Bank. The applicant sought a declaration that no financial debt was due to Canara Bank and requested the bank's exclusion from the list of financial creditors. The applicant also sought an injunction restraining Canara Bank from being recognized as a member of the Committee of Creditors (CoC). The applicant contended that Canara Bank had offered a One Time Settlement (OTS) in July 2017, requiring a payment of Rs.2,26,27,673/-, with a promise to renew the credit limit. The applicant claimed to have made an excess payment of Rs.2,35,00,000/-, but the bank did not account for it as OTS and failed to

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## Issues and analysis

### Issue 1: Whether the applicant is entitled to a declaration that no financial debt is due and payable to …

**Ratio:** The court considered the principles of contract law and the requirements for a valid One

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**Reasoning:** The court found that there was no valid OTS agreement because the applicant had not

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**Interpretation:** The court interpreted the communications between the applicant and the bank as

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**Application:** The court applied the principles of contract law to the facts of the case and

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## Parties

- **Judges:** Ch. Mohd Sharief…
- **Appellants:** R. Rama…
- **Respondents:** Danalakshmi Paper…; Dhanalakshmi…
- **Advocates:** P.Eswara Mo…; P. RAGHUN…; +4 more

## Timeline

- **2017-07-01 — One Time Settlement…**: Canara Bank allegedly offered a One Time Settlement (OTS) in July 2017, requiring a…
- **2017-12-01 — Payment by Ap…**: The applicant claimed to have made an excess payment of Rs.2,35,00,000/- but the bank did…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60 — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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