# In the matter of Maharashtra Shetkari Sugar Ltd. CP (IB) 1767-MB-2017

> NCLT judgment dated 2018-08-30. Citation: TCN-2018-NCLT-00851. Union Bank of India filed a Company Petition under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 30 Aug 2018
- **Citation:** TCN-2018-NCLT-00851
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/maharashtra-shetkari-sugar-ltd-cp-ib-1767-mb-2017-986521fc

## Summary

### Background

Union Bank of India filed a Company Petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) against Maharashtra Shetkari Sugar Ltd, the Corporate Debtor, for failing to repay its outstanding debt. The Corporate Debtor had availed various credit facilities, including term loans and working capital demand loans, which it failed to repay. The Financial Creditor, along with other creditors, had previously filed an application with DRT, Aurangabad, for recovery of the debt. The DRT adjudicated the claim of the Financial Creditors. The Financial Creditor also issued a notice under Section 13(2) of the SARFAESI Act due to the default in repayment, classifying the account as a non-performing asset.

## Facts

Union Bank of India filed a petition against Maharashtra Shetkari Sugar Ltd. under Section 7 of the IBC, 2016, due to the Corporate Debtor's failure to repay its debts. The Corporate Debtor availed Term Loan - I of Rs.43.00 crores on 12.1.2011 and Term Loan II of Rs.6.33 crores on 12.6.2012. Credit facilities of Rs.81.62 crores were sanctioned on 28.3.2013, and a Common Loan Agreement was executed on the same date. The Corporate Debtor also availed a Working Capital Demand Loan of Rs.4.85 crores on 13.11.2014. Further, Rs.18.50 crores were sanctioned on 8.6.2012 towards a Working Capital Facility. The Financial Creditor, along with other creditors, filed an application with DRT, Aurangabad, for the recovery of ₹354,90,83,837 plus interest. The DRT adjudicated the claim

…

## Issues and analysis

### Issue 1: Whether the application under Section 7 …

**Ratio:** Section 7 of the IBC allows a financial creditor to initiate the Corporate Insolvency

…

**Reasoning:** The NCLT found sufficient evidence of debt and default based on the financial contracts,

…

**Interpretation:** Section 7 of the IBC is interpreted to mean that if a financial creditor can

…

**Application:** The ratio and reasoning were applied to the facts of the case, where Union Bank

…

## Parties

- **Judges:** B.S.V. Prakash…; Ravikumar…; +1 more
- **Appellants:** Union Bank of…
- **Respondents:** Maharashtra…

## Timeline

- **2011-01-12 — Term Loan - I…**: Corporate Debtor availed Term Loan - I of Rs.43.00 crores by entering into Term Loan…
- **2012-06-12 — Term Loan - II…**: Corporate Debtor availed Term Loan - II of Rs.6.33 crores by entering into Supplemental…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclt-chandigarh/maharashtra-shetkari-sugar-ltd-cp-ib-1767-mb-2017-986521fc