# In the matter of Maximum Agency Private Limited C.P. (IB) No. 909-KB-2018

> NCLT judgment dated 2019-08-02. Citation: TCN-2019-NCLT-02115. Axis Bank Limited filed an application under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 2 Aug 2019
- **Citation:** TCN-2019-NCLT-02115
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/maximum-agency-private-limited-cp-ib-no-909-kb-2018-56b575e5

## Summary

### Background

Axis Bank Limited filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Maximum Agency Private Limited, seeking initiation of the Corporate Insolvency Resolution Process (CIRP). Axis Bank, the Financial Creditor, claimed that Maximum Agency, the Corporate Debtor, defaulted on a term loan. The Corporate Debtor also acted as a corporate guarantor for loans availed by Quantum Minerals & Metals Private Limited. The Financial Creditor sought to consolidate the loans availed by the Corporate Debtor and the loans for which it stood as a guarantor.

## Facts

Axis Bank Limited, the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Maximum Agency Private Limited, the Corporate Debtor. The Financial Creditor had granted a term loan of Rs. 4,70,00,000/- to the Corporate Debtor in 2009, which was later revised to Rs. 4,55,00,000/-. The Corporate Debtor also acted as a corporate guarantor for loans availed by Quantum Minerals & Metals Private Limited. The Corporate Debtor executed a Deed of Guarantee dated 10th July, 2012 to the extent of Rs. 5,00,00,000/-. The loan facility obtained by the Corporate Debtor from the Financial Creditor as on June 30, 2018, was Rs. 5,86,87,913/-, which was overdue. The Financial Creditor initiated proceedings before the Debt Recovery

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor 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 Financial Creditor presented loan agreements, deeds of guarantee, and other documents

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**Interpretation:** Section 7 provides a mechanism for financial creditors to recover their dues by

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**Application:** The Financial Creditor successfully demonstrated the existence of a financial

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## Parties

- **Judges:** Jinan…; Harish Chander…
- **Appellants:** Axis Ban…
- **Respondents:** Maximum Agency…; Maximum Agency…

## Timeline

- **2009-11-25 — Sanction…**: Financial Creditor granted a Term Loan to the Corporate Debtor under the “Power Rent”…
- **2009-12-08 — Loan Agre…**: Loan Agreement entered into between the…

## 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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