# In the matter of Shree Mahalaxmi Agro Farms Private Limited CP No. 4081-IBC-NCLT-MAH-2019

> NCLT judgment dated 2021-12-23. Citation: TCN-2021-NCLT-00059. Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 23 Dec 2021
- **Citation:** TCN-2021-NCLT-00059
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/shree-mahalaxmi-agro-farms-private-limited-cp-no-4081-ibc-nclt-mah-2019-a37faa37

## Summary

### Background

Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Shree Mahalaxmi Agro Farms Private Limited, claiming default on a financial debt. The corporate debtor's account was declared NPA on 31.12.2014. The financial creditor initiated proceedings under the SARFAESI Act and issued a recall notice due to persistent failure of the corporate debtor to repay the loan. The corporate debtor contended that the application was barred by limitation.

## Facts

Bank of India, the financial creditor, extended credit facilities to Shree Mahalaxmi Agro Farms Private Limited, the corporate debtor. The total debt granted was Rs. 14,43,00,000/-, and the amount claimed to be in default was Rs. 21,64,36,273.63/- as on the date of filing the petition. The date of default was 31.12.2014, and the loan account was declared NPA on the same date. The financial creditor initiated proceedings under the SARFAESI Act and issued a recall notice. The corporate debtor argued that the application was barred by limitation, as it was filed beyond three years from the date of default. The financial creditor produced evidence of acknowledgment of debt by the corporate debtor. The key fact is the date of default and the subsequent acknowledgment of

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## Issues and analysis

### Issue 1: Whether the application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, is …

**Ratio:** Section 18 of the Limitation Act applies to extend the period of limitation for filing an

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**Reasoning:** The NCLT reasoned that the corporate debtor had acknowledged the debt in writing within

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**Interpretation:** Section 18 of the Limitation Act allows for the extension of the limitation

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**Application:** In this case, the corporate debtor acknowledged the debt on 17.01.2017, which

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## Parties

- **Judges:** Bhaskara Pantula…; Shyam Babu…
- **Appellants:** Bank of…
- **Respondents:** Shree Mahalaxmi…

## Timeline

- **2011-12-02 — Corporate Debtor…**: The Corporate Debtor approached Applicant Bank…
- **2014-12-31 — Date of D…**: The date of default is stated to be 31.12.2014. The loan account of the Corporate Debtor…

## 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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