# In the matter of Murli Industries Ltd CP 66-Mah-2017

> NCLT judgment dated 2017-04-05. Citation: TCN-2017-NCLT-00924. The case involves an insolvency and bankruptcy application filed by Edelweiss Asset…

- **Court:** NCLT
- **Order date:** 5 Apr 2017
- **Citation:** TCN-2017-NCLT-00924
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/murli-industries-ltd-cp-66-mah-2017-5bb5cce2

## Summary

### Background

The case involves an insolvency and bankruptcy application filed by Edelweiss Asset Reconstruction Co. Ltd against Murli Industries Limited. Murli Industries had entered into a master restructuring agreement with various lenders, including Bank of Baroda and Punjab National Bank, due to financial difficulties. The lenders had sanctioned term loans and working capital facilities. The corporate debtor faced strain in project implementation, leading to debt restructuring. State Bank of Mysore disbursed loans to Murli Industries, which were later assigned to Edelweiss Asset Reconstruction Co. Ltd. Bank of Baroda, as a lead bank, issued notices under the SARFAESI Act for recovery of dues. The independent auditor's report indicated defaults in repayment of dues to financial

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## Facts

Murli Industries Limited entered into a master restructuring agreement on 2011-06-06 with several lenders, including Bank of Baroda and Punjab National Bank, due to financial difficulties. The lenders had sanctioned term loans and working capital facilities to Murli Industries. State Bank of Mysore disbursed Rs.50 crores (SBM Facility-I) on 2011-03-31, with a defaulted amount of Rs.84,88,88,896 as of 2017-03-28. The same bank sanctioned Rs.3,38,49,765 (SBM Facility-II) on 2011-03-31, with a defaulted amount of Rs.18,74,85,083 as of 2017-03-28. Bank of Baroda, as the lead bank, issued a notice on 2014-05-02 under Section 13(2) of the SARFAESI Act for recovery of Rs.1365.40 crores. A possession notice was issued on 2015-03-07. Demble Ramani & Co.'s auditor's report

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## Issues and analysis

### Issue 1: Whether the petition filed by Edelweiss Asset Reconstruction Co. Ltd, as an assignee of a financial …

**Ratio:** Section 5(7) of the I&B Code, 2016, clearly provides that an assignee of a financial

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**Reasoning:** The court reasoned that since Edelweiss Asset Reconstruction Co. Ltd is an assignee of

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**Interpretation:** Section 5(7) broadens the definition of a financial creditor to include

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**Application:** Since Edelweiss Asset Reconstruction Co. Ltd. is the assignee of the debt, it

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## Parties

- **Judges:** B.S.V. Prakash…; V. Nallasen…
- **Appellants:** Edelweiss Asset…
- **Respondents:** Murli Industries…

## Timeline

- **2011-03-31 — State Bank of Mysore disbursed Rs.50 crores…**: State Bank of Mysore disbursed a sum of Rs.50 crores (SBM Facility-I) to the corporate…
- **2011-03-31 — State Bank of Mysore sanctioned Rs.3,38,49,765…**: State Bank of Mysore sanctioned a sum of Rs.3,38,49,765 (SBM Facility-II) to 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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