# In the matter of Ellora Paper Mills Ltd.

> NCLT judgment dated 2017-07-19. Citation: TCN-2017-NCLT-00723. Ajitnath Steels Pvt. Ltd. filed an Insolvency and Bankruptcy Petition under Section 7 of the…

- **Court:** NCLT
- **Order date:** 19 Jul 2017
- **Citation:** TCN-2017-NCLT-00723
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/ellora-paper-mills-ltd-a7cd935c

## Summary

### Background

Ajitnath Steels Pvt. Ltd. filed an Insolvency and Bankruptcy Petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules 2016, to initiate Insolvency Resolution Process against the Corporate Debtor, Ellora Paper Mills Limited. The petitioner claimed that a loan agreement was entered into on 08.09.2010, where the petitioner agreed to extend financial assistance to the respondent corporate debtor up to Rs. 3,42,70,000. The loan was disbursed between 09.09.2010 and 11.11.2010. The petitioner issued a notice on 29.09.2016 requesting repayment, followed by another notice on 07.11.2016 under Sections 433 and 434(a) of the Companies Act, 1956. The respondent denied the

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## Facts

On 08.09.2010, Ajitnath Steels Pvt. Ltd. (Petitioner) and Ellora Paper Mills Limited (Respondent) entered into a Loan Agreement where the Petitioner agreed to provide financial assistance up to Rs. 3,42,70,000 to the Respondent. The loan was disbursed between 09.09.2010 and 11.11.2010. The loan carried an interest of 12% per annum after an initial interest-free period of four months. The loan was secured by a pledge of 2,98,000 equity shares of the Respondent Company, representing 14.9% of its equity capital, held by Mr. Sudhir Goenka (HUF). The Respondent executed a Promissory Note for Rs. 3,42,70,000 in favor of the Petitioner. The Petitioner sent a notice on 29.09.2016 requesting repayment, followed by a notice on 07.11.2016 under Sections 433 and 434(a) of the

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## Issues and analysis

### Issue 1: Whether the application is …

**Ratio:** Section 18 of the Limitation Act, 1963 states that an acknowledgement of debt in the

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**Reasoning:** The Balance Sheet for the year 2013-14 was signed by the Directors on 24.09.2014, thus at

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**Interpretation:** The court interpreted Section 18 of the Limitation Act to mean that an

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**Application:** The court applied the ratio to the fact that the respondent's balance sheet

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## Parties

- **Judges:** B.S.V. Prakash…; V. Nallasen…
- **Appellants:** Ajitnath Steels…
- **Respondents:** Ellora Paper…

## Timeline

- **2010-08-04 — Loan Agre…**: Loan agreement entered into between Ajitnath Steels Pvt. Ltd. and Ellora Paper Mills…
- **2010-09-09 — Loan Disbursem…**: Loan disbursement to…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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