# In the matter of Ananda Bharathi Fertilizers (India) Pvt. Ltd.

> NCLT judgment dated 2024-02-14. Citation: TCN-2024-NCLT-02598. Canara Bank, the Financial Creditor (FC), filed an application to initiate Corporate Insolvency…

- **Court:** NCLT
- **Order date:** 14 Feb 2024
- **Citation:** TCN-2024-NCLT-02598
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/ananda-bharathi-fertilizers-india-pvt-ltd-fc3b89ac

## Summary

### Background

Canara Bank, the Financial Creditor (FC), filed an application to initiate Corporate Insolvency Resolution Process (CIRP) against Ananda Bharathi Fertilizers (India) Pvt. Ltd, the Corporate Debtor (CD), due to alleged default in discharging a financial debt of Rs 17,85,85,579. The CD was incorporated on 14.02.2011 for manufacturing customized fertilizers and soil conditioners. On 24.03.2016, the FC sanctioned and disbursed a term loan of Rs 900 lakhs and a working capital loan of Rs 110 lakhs. These loans were restructured in 2019. The CD allegedly defaulted on repayment, leading to the loan account being classified as a Non-Performing Asset (NPA) on 03.06.2018. The accounts were restructured by creating FITL-I and FITL-II, but the CD's account slipped into NPA again

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## Facts

Canara Bank (Financial Creditor) filed an application to initiate CIRP against Ananda Bharathi Fertilizers (India) Pvt. Ltd (Corporate Debtor) due to a default of Rs 17,85,85,579. The Corporate Debtor was incorporated on 14.02.2011 and obtained loans from the Financial Creditor, including a term loan of Rs 900 lakhs and a working capital loan of Rs 110 lakhs sanctioned on 24.03.2016. These loans were restructured in 2019. The Corporate Debtor defaulted on repayment, leading to the account being classified as NPA on 03.06.2018. The Financial Creditor initiated SARFAESI proceedings, issuing demand and possession notices. The Corporate Debtor requested a One Time Settlement (OTS), which was rejected. The Corporate Debtor claimed delays in working capital release and the

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor committed a default in repayment of its financial debt to the …

**Ratio:** The term 'default' under Section 3(12) of the IBC means non-payment of debt when the

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**Reasoning:** The NCLT found that the Corporate Debtor owed the Financial Creditor Rs 17,85,85,579 as

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**Interpretation:** The definition of 'default' under Section 3(12) of the IBC is interpreted to

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

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## Parties

- **Judges:** Rajeev Bh…; Sanjay…
- **Appellants:** Canara…
- **Respondents:** Ananda Bharathi…

## Timeline

- **2011-02-14 — Incorporatio…**: Ananda Bharathi Fertilizers…
- **2016-03-24 — Loan San…**: Canara Bank sanctioned and disbursed a term loan of Rs 900 lakhs and a working capital…

## 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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