# In the matter of MPL Parts and Services Private Limited IBA-779--2019

> NCLT judgment dated 2020-11-13. Citation: TCN-2020-NCLT-00253. 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-00253
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/mpl-parts-and-services-private-limited-iba-779-2019-713b8bb3

## Summary

### Background

The case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 by Sundaram BNP Paribas Home Finance Limited (Financial Creditor) against MPL Parts and Services Private Limited (Corporate Debtor) for initiation of Corporate Insolvency Resolution Process (CIRP). The Financial Creditor claimed a default on a loan agreement. The Corporate Debtor argued that the application was not maintainable due to prior actions taken under the SARFAESI Act and that the value of the secured assets exceeded the outstanding debt.

## Facts

Sundaram BNP Paribas Home Finance Limited (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 against MPL Parts and Services Private Limited (Corporate Debtor). The Financial Creditor and Corporate Debtor entered into a Loan Agreement dated 2015-06-30, where the Financial Creditor sanctioned Rs.3,78,00,000 to the Corporate Debtor. The Corporate Debtor was obliged to pay Rs.5,86,908 per month for 120 months at 14% interest. The Corporate Debtor defaulted, and the account was declared NPA on 2016-10-31. The Financial Creditor issued a demand notice under Section 13(2) of the SARFAESI Act, 2002, on 2017-02-01. The Corporate Debtor argued that the Financial Creditor had already initiated action under the SARFAESI Act, taken

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## Issues and analysis

### Issue 1: Whether the pendency of actions under the SARFAESI Act bars the filing of an application under …

**Ratio:** The Insolvency and Bankruptcy Code, 2016 has overriding effect over other laws, including

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**Reasoning:** The court relied on precedents from the NCLAT and the Madras High Court, which held that

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**Interpretation:** Section 238 of the IBC provides that the provisions of the Code shall have

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**Application:** In this case, the Corporate Debtor argued that the Financial Creditor had

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## Parties

- **Judges:** R. Sucha…; Anil Ku…
- **Appellants:** Sundaram BNP…
- **Respondents:** MPL Parts and…

## Timeline

- **2015-05-28 — Deed of Gua…**: Deed of Guarantee executed…
- **2015-06-30 — Loan Agre…**: Loan Agreement entered into between the…

## 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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