# In the matter of Basantar Breweries Private Limited

> NCLT judgment dated 2024-09-09. Citation: TCN-2024-NCLT-00644. Jammu & Kashmir Bank Ltd. filed an application under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 9 Sept 2024
- **Citation:** TCN-2024-NCLT-00644
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/basantar-breweries-private-limited-ee1addbc

## Summary

### Background

Jammu & Kashmir Bank Ltd. filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against Basantar Breweries Private Limited, citing a default on financial debt. The Corporate Debtor opposed the petition, primarily arguing that it was barred by limitation and that the NPA classification was incorrect. The Financial Creditor claimed a total debt of Rs. 51.64 crores, with the date of default being 31.12.2015. The Corporate Debtor argued that the NPA date should be 30.09.2015, making the petition time-barred. The Corporate Debtor also submitted OTS proposals, which the Financial Creditor argued served as an acknowledgment of debt, extending the limitation period. IA No. 1784/2024

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## Facts

Jammu & Kashmir Bank Ltd. (Financial Creditor) filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate CIRP against Basantar Breweries Private Limited (Corporate Debtor). The Corporate Debtor was incorporated on 08.02.2013. The Financial Creditor claimed a total debt of Rs. 51.64 crores. Initially in 2010, the Corporate Debtor approached the Financial Creditor for credit facilities (Term Loan-1 Rs 21,48,00,000/- & Cash Credit Facility Rs 3,50,00,000/-). In 2011, an additional credit facility (Term Loan-II) amounting to Rs 11, 92, 00,000/- was availed. In 2014, a loan agreement was executed. In 2015, the Cash Credit Facility of Rs 10,50,00,000/- was further enhanced to Rs 16,00,00,000/-. The Financial Creditor claimed the date

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## Issues and analysis

### Issue 1: Whether the petition filed by the …

**Ratio:** Section 7 of the IBC allows for the initiation of CIRP if a default has occurred and the

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**Reasoning:** The court found that the OTS proposal submitted by the Corporate Debtor constituted an

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**Interpretation:** The court interpreted Section 18 of the Limitation Act in conjunction with the

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**Application:** The court applied the ratio to the facts, noting that the OTS proposal was made

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## Parties

- **Judges:** Harnam Singh…; ARVIND DEVA…
- **Appellants:** Jammu & Kashmir…
- **Respondents:** BASANTAR BREWERIES…
- **Advocates:** Mayank M…; Lakshmi Kant…

## Timeline

- **2010-01-01 — Initial Credit…**: Corporate Debtor approached Financial Creditor for credit facilities (Term Loan-1 Rs…
- **2011-01-01 — Additional Credit…**: An additional credit facility (Term Loan-II)…

## 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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