# In the matter of MPL 2 Wheelers Private Limited IBA-780-2019

> NCLT judgment dated 2020-11-13. Citation: TCN-2020-NCLT-00256. The case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 13 Nov 2020
- **Citation:** TCN-2020-NCLT-00256
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/mpl-2-wheelers-private-limited-iba-780-2019-5b7366a7

## Summary

### Background

The case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) by Sundaram BNP Paribas Home Finance Limited (Financial Creditor) against M/s. MPL 2 Wheelers Private Limited (Corporate Debtor) for initiation of Corporate Insolvency Resolution Process (CIRP). The Financial Creditor claimed a default of Rs.2,79,08,639/- by the Corporate Debtor, whose account was classified as Non-Performing Asset (NPA) on 31.10.2016. The Corporate Debtor opposed the application, arguing that the Financial Creditor had already initiated recovery proceedings under the SARFAESI Act, 2002, and had taken possession of the mortgaged property. The Corporate Debtor also contended that the value of the property was more than the debt claimed.

## Facts

Sundaram BNP Paribas Home Finance Limited (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) against M/s. MPL 2 Wheelers Private Limited (Corporate Debtor). The Financial Creditor is a limited company incorporated on 02.07.1999. The Corporate Debtor is a private limited company incorporated on 15.09.2011. The Financial Creditor sanctioned a loan of Rs.3,00,00,000/- to the Corporate Debtor as per a Loan Agreement dated 30.06.2015. The Corporate Debtor was obliged to pay Rs.4,65,000/- per month for 120 months at 14% p.a. interest. The Corporate Debtor defaulted on the loan, and the account was classified as NPA on 31.10.2016. The Financial Creditor claimed a sum of Rs.2,79,08,639/- as outstanding debt. The

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## Issues and analysis

### Issue 1: Whether the pendency of SARFAESI proceedings initiated by the Financial Creditor bars the …

**Ratio:** The pendency of actions under the SARFAESI Act is not a bar for filing an application

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**Reasoning:** The court relied on the NCLAT's decision in Rakesh Kumar Gupta -Vs- Mahesh Bansal &

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**Interpretation:** Section 238 of the IBC overrides other laws, including the SARFAESI Act,

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**Application:** Despite the Financial Creditor initiating SARFAESI proceedings and taking

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## Parties

- **Judges:** R. Sucha…; Anil Ku…
- **Respondents:** M/s. MPL 2…

## Timeline

- **1999-07-02 — Incorporation of…**: Sundaram BNP Paribas Home…
- **2011-09-15 — Incorporation of…**: M/s. MPL 2 Wheelers Private…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(8) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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