# In the matter of M M Agro Ventures Private Limited CP No.1246-KB-2019

> NCLT judgment dated 2021-03-18. Citation: TCN-2021-NCLT-02651. Union Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 18 Mar 2021
- **Citation:** TCN-2021-NCLT-02651
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/m-m-agro-ventures-private-limited-cp-no1246-kb-2019-da752bd8

## Summary

### Background

Union Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against MM Agro Ventures Private Limited. The bank, formerly known as Corporation Bank, claimed that the corporate debtor defaulted on a loan of Rs. 6,92,19,480.50 as of July 1, 2019, leading to the account being declared as NPA on July 29, 2017. The bank had sanctioned a loan of Rs. 6,65,00,000 to the corporate debtor, secured by mortgaged properties and personal guarantees.

## Facts

Union Bank of India (formerly Corporation Bank) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against MM Agro Ventures Private Limited. The bank had sanctioned a loan of Rs. 6,65,00,000 to the corporate debtor, secured by mortgaged properties and personal guarantees. The corporate debtor's account was declared as NPA on July 29, 2017, due to non-payment. As of July 1, 2019, the amount in default was Rs. 6,92,19,480.50. The corporate debtor argued that the bank had not disbursed the loan amount on time, leading to project delays and destruction of raw materials. The bank had also obtained a Recovery Certificate for Rs. 6,15,67,529.50 from the DRT in OA No. 754/2018. The

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## Issues and analysis

### Issue 1: Whether the application filed by Union Bank of India under Section 7 of the Insolvency and …

**Ratio:** Section 7 of the Insolvency and Bankruptcy Code, 2016 allows a financial creditor to

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**Reasoning:** The NCLT found that the application filed by Union Bank of India met the requirements of

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**Interpretation:** Section 7 of the IBC provides a mechanism for financial creditors to recover

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**Application:** In this case, the NCLT applied Section 7 of the IBC to the facts presented by

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## Parties

- **Judges:** Rajasekha…; Harish Chander…
- **Appellants:** Union Bank of…
- **Respondents:** MM Agro Ventures…

## Timeline

- **2010-09-18 — GPA Date…**: Date of the General Power of Attorney (GPA) authorizing Mr. Dipak Kumar Tiwari to file…
- **2012-11-20 — Mortgage…**: Date of Registered Sale Deed No. 4499, where property of Personal Guarantor Sri Subesh…

## 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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