# In the matter of Sri Munisuvrata Agri International Ltd. CA (IB) Nos. 635, 652, 722 & 778-KB-2018 and Inv. A. (IB) No. 800-KB-2018 in CP (IB) No. 615-KB-2018

> NCLT judgment dated 2018-11-15. Citation: TCN-2018-NCLT-00329. The case involves an application filed by Sri Munisuvrata Agri International Ltd. under Section…

- **Court:** NCLT
- **Order date:** 15 Nov 2018
- **Citation:** TCN-2018-NCLT-00329
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/sri-munisuvrata-agri-international-ltd-ca-ib-nos-635-652-722-778-kb-2018-and-inv-93e7188d

## Summary

### Background

The case involves an application filed by Sri Munisuvrata Agri International Ltd. under Section 10 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP). Several applications were filed challenging the maintainability of the Section 10 application, alleging malicious intent to defraud creditors and shareholders. The corporate debtor claimed inability to continue business due to an RBI circular discontinuing Letters of Undertaking and Letters of Comfort for trade credit, and financial difficulties. Operational creditors and other parties raised objections, citing pending litigation, fraudulent activities, and non-compliance with procedural requirements.

## Facts

Sri Munisuvrata Agri International Ltd. (formerly LMJ International Ltd.) filed an application under Section 10 of the Insolvency and Bankruptcy Code, 2016, to initiate CIRP, citing inability to conduct business due to an RBI circular and financial difficulties. The company was originally incorporated on November 11, 1992. The corporate debtor had total debts of Rs. 544,00,00,000/- and an amount in default of Rs. 536,92,00,000/-. Several operational creditors, including Sleepwell Industries Co. Ltd. and Swiss Singapore Overseas Enterprises Pte. Ltd., filed intervening applications objecting to the CIRP, alleging fraudulent activities and malicious intent. The corporate debtor changed its name and registered office shortly before filing the application. The financial

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## Issues and analysis

### Issue 1: Whether the Corporate Applicant succeeds in proving …

**Ratio:** A 'default' under Section 3(12) of the Insolvency and Bankruptcy Code means non-payment

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**Reasoning:** The NCLT found that the corporate applicant failed to provide sufficient evidence to

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**Interpretation:** The court interpreted Section 3(12) of the Code to require proof that the debt

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**Application:** The NCLT applied the definition of 'default' to the facts of the case and found

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## Parties

- **Judges:** Jinan…
- **Respondents:** Munisuvrata Agri…; Sleepwell…

## Timeline

- **1992-11-11 — Incorpor…**: Corporate Debtor incorporated…
- **2013-01-03 — Settlement o…**: Control and management of the Corporate Applicant vested upon the present Board of…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 3(12) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-3)

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