# In the matter of Maa Durga Rice Processing & Exports Private Limited TP No. 30-CTB-2019 in CP (IB) No. 1323-KB-2018

> NCLT judgment dated 2019-09-04. Citation: TCN-2019-NCLT-01569. The Bank of India, acting as the Financial Creditor, filed an application under Section 7 of…

- **Court:** NCLT
- **Order date:** 4 Sept 2019
- **Citation:** TCN-2019-NCLT-01569
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/maa-durga-rice-processing-exports-private-limited-tp-no-30-ctb-2019-in-cp-ib-no-cba5d7da

## Summary

### Background

The Bank of India, acting as the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s Maa Durga Rice Processing & Exports Private Limited, the Corporate Debtor. The application was initially filed with the NCLT, Kolkata Bench, and later transferred to the Cuttack Bench. The Corporate Debtor had availed various financial facilities from the applicant since 2004, including cash credit and term loan facilities. The Corporate Debtor defaulted on repaying the financial debt of Rs. 27,97,61,164/- as of August 8, 2018, leading to the loan being declared a non-performing asset (NPA) on March 31, 2014.

## Facts

The Bank of India extended financial facilities, including cash credit and term loans, to M/s Maa Durga Rice Processing & Exports Private Limited starting in 2004. The Corporate Debtor defaulted on repaying a financial debt of Rs. 27,97,61,164 as of August 8, 2018. Consequently, the loan was classified as a Non-Performing Asset (NPA) on March 31, 2014. The Corporate Debtor acknowledged availing the loan but claimed that their request for loan enhancement was denied by the bank, hindering their business operations. They also cited losses due to cyclones in 2012 and 2019. The Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. The

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor, Bank of India, under Section 7 of the …

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

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**Reasoning:** The NCLT observed that the Financial Creditor had provided financial assistance to the

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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 Bank of India, as the Financial Creditor, demonstrated the

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## Parties

- **Judges:** Sucharit…; Satya Ranjan…
- **Respondents:** M/s Maa Durga…

## Timeline

- **2004-01-01 — Financial Facilities…**: Corporate Debtor availed various financial facilities from the applicant, cash credit…
- **2014-03-31 — Loan Declar…**: The loan was declared as…

## 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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