# In the matter of Maruti Kesri Nandan Agrofoods Private Limited CP (IB) No.167-Chd-Hry-2019

> NCLT judgment dated 2020-02-06. Citation: TCN-2020-NCLT-02052. Punjab National Bank filed an application under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 6 Feb 2020
- **Citation:** TCN-2020-NCLT-02052
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/maruti-kesri-nandan-agrofoods-private-limited-cp-ib-no167-chd-hry-2019-34ece004

## Summary

### Background

Punjab National Bank filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s Maruti Kesri Nandan Agrofoods Private Limited, alleging default on financial debts. The application was filed due to the corporate debtor's failure to adhere to the terms and conditions of loan agreements and failure to pay dues as per the agreed schedule. The corporate debtor had approached the bank for cash credit and term loan facilities, which were sanctioned. To secure these facilities, the corporate debtor executed various loaning and security documents, including hypothecation and mortgage of properties. Despite repeated requests from the bank, the corporate debtor failed to regularize

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## Facts

Punjab National Bank (PNB) filed an application under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s Maruti Kesri Nandan Agrofoods Private Limited. The corporate debtor had approached PNB for a Cash Credit (Hypo) Limit of Rs. 201 Lacs and a Term Loan of Rs. 148 Lacs, which were sanctioned on 06.06.2014. To secure these loans, the corporate debtor executed various loaning and security documents, including hypothecation of goods and book debts, term loan agreements, and mortgage of properties. The corporate debtor also obtained a car loan of ₹11,18,389/- from PNB. The corporate debtor failed to abide by the terms and conditions of the loan agreements and failed to pay the dues as per the

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## Issues and analysis

### Issue 1: Whether a default has occurred in respect of the financial debt owed by the corporate debtor to the …

**Ratio:** The Insolvency and Bankruptcy Code, 2016 (IBC) defines 'default' in Section 3(12) as

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**Reasoning:** The Adjudicating Authority examined the loan agreements, security documents, and the

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**Interpretation:** The term 'default' is interpreted broadly to include any non-payment of debt,

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**Application:** In this case, the corporate debtor failed to make payments on the cash credit

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## Parties

- **Judges:** Ajay Kumar…; Pradeep R.…
- **Appellants:** Punjab National…
- **Respondents:** M/s Maruti Kesri…

## Timeline

- **2014-06-06 — Sanction of Cash Credit…**: Punjab National Bank sanctioned Cash Credit (Hypo) Limit of Rs.201 Lacs and a Term Loan…
- **2014-06-06 — Execution of Loaning…**: M/s Maruti Kesri Nandan Agrofoods Private Limited executed various loaning and security…

## 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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