# In the matter of Vindhyavasini Corporation Private Limited I.A. 23-2021 in C.P. (IB) - 65-MB-2020

> NCLT judgment dated 2021-08-30. Citation: TCN-2021-NCLT-01260. State Bank of India filed a petition under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 30 Aug 2021
- **Citation:** TCN-2021-NCLT-01260
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/vindhyavasini-corporation-private-limited-ia-23-2021-in-cp-ib-65-mb-2020-89cef065

## Summary

### Background

State Bank of India filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Vindhyavasini Corporation Private Limited, the Corporate Debtor, due to a default of Rs. 338.55 Crores. The Corporate Debtor had approached the Petitioner for credit facilities/term loans, which were sanctioned via a Letter of Arrangement dated 21.09.2010. Subsequently, the Petitioner granted renewal and enhancement of further facilities via a Sanction Letter dated 24.03.2012. The Corporate Debtor defaulted on repayments as of 31.12.2012, leading the Petitioner to classify the account as NPA on 31.03.2013. The Petitioner issued a demand notice under Section 13 of the SARFAESI Act, 2002, and filed an

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## Facts

State Bank of India (SBI) extended credit facilities to Vindhyavasini Corporation Private Limited. A Letter of Arrangement was issued on 2010-09-21, followed by a Sanction Letter on 2012-03-24. The Corporate Debtor defaulted on repayments by 2012-12-31, leading SBI to classify the account as a Non-Performing Asset (NPA) on 2013-03-31. SBI issued a demand notice under Section 13 of the SARFAESI Act on 2013-07-02 and filed Original Application No. 760/2014 before the Debts Recovery Tribunal (DRT), Mumbai, on 2014-06-26. The DRT granted interim relief on 2015-01-08, restraining the Corporate Debtor from creating third-party rights on secured assets. SBI declared the Corporate Debtor as a willful defaulter in September 2014. A Forensic Audit was conducted in November 2015,

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## Issues and analysis

### Issue 1: Whether the Limitation Act, 1963 is applicable to proceedings under the Insolvency and Bankruptcy …

**Ratio:** Section 238A of the Insolvency and Bankruptcy Code, 2016 explicitly makes the provisions

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**Reasoning:** The NCLT referred to Section 238A of the IBC, which was inserted in 2018, to clarify that

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**Interpretation:** Section 238A ensures that the principles of limitation apply to insolvency

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**Application:** Since Section 238A of the IBC incorporates the Limitation Act, 1963, the NCLT

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## Parties

- **Judges:** SUCHITRA KANUPARTH…; Chandra Bha…; +1 more
- **Appellants:** State Bank of…
- **Respondents:** Vindhyavasini…
- **Advocates:** Zal Andhya…; Rohit G…; +5 more

## Timeline

- **2010-09-21 — Letter of Arr…**: State Bank of India issued a Letter of Arrangement to Vindhyavasini Corporation Private…
- **2012-03-24 — Sanction…**: State Bank of India granted renewal and enhancement of further facilities via a Sanction…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5 — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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