# In the matter of L.S.P. Agro limited IBA-210-2019

> NCLT judgment dated 2020-01-25. Citation: TCN-2020-NCLT-02186. The case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 25 Jan 2020
- **Citation:** TCN-2020-NCLT-02186
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/lsp-agro-limited-iba-210-2019-158accf1

## Summary

### Background

The case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 by Stressed Assets Stabilization Fund (SASF), the Financial Creditor, against L.S.P Agro Limited, the Corporate Debtor, for initiation of Corporate Insolvency Resolution Process (CIRP). The Corporate Debtor defaulted on repayment of ₹11,05,92,701 as of 29.04.2019. IDBI had sanctioned a Rupee Term Loan of ₹650lacs to the Corporate Debtor based on a Loan Agreement dated 06.03.1998, with disbursements made on various dates. IDBI further sanctioned a second term loan of ₹425lacs. When the Corporate Debtor defaulted, IDBI issued a Recall Notice on 15.01.2002. IDBI filed an Original Application before DRT-I, Chennai, which was later transferred to DRT-II. The Central Government

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## Facts

Stressed Assets Stabilization Fund (SASF) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against L.S.P Agro Limited. The Corporate Debtor defaulted on repayment of ₹11,05,92,701 as of 29.04.2019. IDBI had sanctioned a Rupee Term Loan of ₹650lacs to the Corporate Debtor based on a Loan Agreement dated 06.03.1998, with disbursements made on various dates including ₹2,12,00,000 on 21.03.1998, ₹38,00,000 on 23.03.1998, ₹2,00,00,000 on 20.08.1998, ₹1,00,00,000 on 6.11.1998, ₹85,00,000 on 17.12.1999, and ₹15,00,000 on 08.12.1999, totaling ₹6,50,00,000. IDBI further sanctioned a second term loan of ₹425lacs, disbursing ₹2,00,00,000 on 16.06.2000, ₹1,50,00,000 on 23.08.2000, and

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## Issues and analysis

### Issue 1: Whether this IBA is maintainable by the Applicant or not for the Corporate Debtor Counsel says the …

**Ratio:** A Trust constituted by the Central Government of India for taking over the loan given by

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**Reasoning:** The court reasoned that the applicant, being a trust constituted by the Central

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**Interpretation:** This interprets that a trust created by the Central Government to manage

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**Application:** The court applied this principle to the case, stating that the Corporate Debtor

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## Parties

- **Judges:** B.S.V. Prakash…; S. VIJAYARA…
- **Respondents:** L.S.P Agro…
- **Advocates:** E. Om Pr…; P.Elayara…; +3 more

## Timeline

- **1998-03-06 — Loan Agreeme…**: IDBI sanctioned a Rupee Term Loan of ₹650lacs to the Corporate Debtor based on a Loan…
- **1998-03-21 — Loan Disbur…**: ₹2,12,00,000 was…

## 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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