# In the matter of Ramanashree Consumers Products Private Limited CP (IB) No.158-10-AMR-2019

> NCLT judgment dated 2019-11-15. Citation: TCN-2019-NCLT-00579. The case involves a petition filed by Ramanasree Consumer Products Private Limited under…

- **Court:** NCLT
- **Order date:** 15 Nov 2019
- **Citation:** TCN-2019-NCLT-00579
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/ramanashree-consumers-products-private-limited-cp-ib-no158-10-amr-2019-0436df51

## Summary

### Background

The case involves a petition filed by Ramanasree Consumer Products Private Limited under Section 10 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) for itself due to its default in payment of a financial debt. The company was incorporated on 27.04.2010 and availed a term loan of Rs. 21.59 Lakhs and a cash credit facility of Rs. 900 Lakhs from Bank of India, Tirupathi Branch. The company defaulted in repayment of the credit facility as early as March 2016.

## Facts

Ramanasree Consumer Products Private Limited, incorporated on April 27, 2010, sought to initiate Corporate Insolvency Resolution Process (CIRP) under Section 10 of the Insolvency and Bankruptcy Code, 2016, due to its default in financial debt repayment. The company had obtained a term loan of Rs. 21.59 Lakhs and a cash credit facility of Rs. 900 Lakhs from Bank of India, Tirupathi Branch. The company defaulted on repayments starting in March 2016. Bank of India, the respondent, argued that the petitioner was attempting to evade actions under the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (SARFAESI Act) and recovery proceedings before the Debt Recovery Tribunal. The petitioner had passed a special resolution to

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## Issues and analysis

### Issue 1: Whether the Company Petition filed under Section 10 of the Insolvency and Bankruptcy Code, 2016 …

**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 defaulted on its financial debt and had passed

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**Interpretation:** Section 10 provides a mechanism for a corporate debtor facing financial

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**Application:** The court applied the ratio to the facts by noting that the petitioner had

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## Parties

- **Judges:** Janab Mohammed…
- **Respondents:** Ramanasree…; Bank of…
- **Advocates:** V. Ravi…; V. K. S…; +2 more

## Timeline

- **2010-04-27 — Company Incor…**: Ramanasree Consumer Products…
- **2016-03-01 — Default on Credit…**: Ramanasree Consumer Products Private Limited defaulted in repayment of the credit…

## 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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