# In the matter of Nithin Grains and Mills Private Limited CP (IB) No. 157-10-AMR-TP-2019

> NCLT judgment dated 2019-11-15. Citation: TCN-2019-NCLT-00577. The case involves a petition filed by Nithin Grains and Mills Private Limited under Section 10…

- **Court:** NCLT
- **Order date:** 15 Nov 2019
- **Citation:** TCN-2019-NCLT-00577
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/nithin-grains-and-mills-private-limited-cp-ib-no-157-10-amr-tp-2019-d0df21f4

## Summary

### Background

The case involves a petition filed by Nithin Grains and Mills Private Limited under Section 10 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) due to its default in payment of a financial debt. The company, incorporated on 03.09.2014, availed a term loan of Rs. 10 crores and a cash credit facility of Rs. 7.25 crores from Bank of India, Tirupathi Branch. It defaulted in repayment as early as June 2016. Previously, another company, M/s Vishwabharti Foods Private Limited, had filed a Company Petition against Nithin Grains, which was admitted and CIRP initiated, but later withdrawn following approval from the Committee of Creditors (CoC).

## Facts

Nithin Grains and Mills Private Limited, the petitioner, sought to initiate CIRP under Section 10 of the Insolvency and Bankruptcy Code, 2016, due to defaulting on financial debt. Incorporated on September 3, 2014, the company had availed a term loan of Rs. 10 crores and a cash credit facility of Rs. 7.25 crores from Bank of India, Tirupathi Branch, the respondent. The company defaulted on repayments starting in June 2016. Prior to this petition, M/s Vishwabharti Foods Private Limited had initiated CIRP against Nithin Grains, which was later withdrawn. The respondent bank contended that Nithin Grains was attempting to evade actions under the SARFAESI Act and recovery proceedings. The petitioner enclosed a copy of the special resolution passed by the shareholders to

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## Issues and analysis

### Issue 1: Whether the Petitioner, Nithin Grains and Mills Private Limited, is eligible to initiate Corporate …

**Ratio:** Section 10 of the Insolvency and Bankruptcy Code, 2016 allows a corporate debtor to

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**Reasoning:** The court reasoned that the petitioner had admittedly defaulted on a financial debt and

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**Interpretation:** Section 10 is interpreted to mean that if a corporate debtor admits to

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**Application:** The court applied the ratio to the facts by noting that Nithin Grains and Mills

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## Parties

- **Judges:** MOHAMMED…
- **Respondents:** Nithin Grains And…; Bank of…

## Timeline

- **2014-09-03 — Company Incor…**: Nithin Grains and Mills…
- **2016-06-01 — Default on Re…**: Nithin Grains and Mills Private Limited…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 10 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-10)

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