# In the matter of Birbhum Chemicals and Fertilisers Ltd.

> NCLT judgment dated 2024-01-08. Citation: TCN-2024-NCLT-03262. Canara Bank filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 8 Jan 2024
- **Citation:** TCN-2024-NCLT-03262
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/birbhum-chemicals-and-fertilisers-ltd-6f664a24

## Summary

### Background

Canara Bank filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Birbhum Chemicals and Fertilisers Ltd. The application was based on the corporate debtor's default on a financial debt. The Financial Creditor had advanced Rs. 50 crores by way of WC-OCC/OCBD in terms of sanction letter dated 23.12.2023 and further sanction letter dated 27.02.2023.

## Facts

Canara Bank, the Financial Creditor, advanced Rs. 50 crores to Birbhum Chemicals and Fertilisers Ltd, the Corporate Debtor, through WC-OCC/OCBD, as per sanction letters dated 2023-12-23 and 2023-02-27. The Corporate Debtor defaulted on the repayment of the debt. The total amount in default was Rs. 50,70,30,550.53/-, comprising Rs. 49,94,22,414/- towards principal and Rs. 76,07,664/- towards interest. The date of default was 2023-06-30, which was the date the Corporate Debtor's account was declared as NPA. The Financial Creditor filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate CIRP against the Corporate Debtor. The Corporate Debtor did not dispute the claim made by the Financial Creditor. The Financial Creditor submitted

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## Issues and analysis

### Issue 1: Whether the application filed by Canara Bank under Section 7 of the Insolvency and Bankruptcy Code, …

**Ratio:** The Hon'ble Apex Court in Laxmi Pat Surana vs. Union Bank of India held that the date of

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**Reasoning:** The NCLT considered the submissions of the Financial Creditor, the documents and evidence

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**Interpretation:** Section 7 of the Insolvency and Bankruptcy Code, 2016, allows a financial

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**Application:** In this case, the Corporate Debtor's account was declared as NPA on 2023-06-30,

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## Parties

- **Judges:** BIDISHA BA…; SHRI. D.…; +1 more
- **Appellants:** Canara…
- **Respondents:** Birbhum Chemicals…

## Timeline

- **2023-12-23 — Sanction…**: Canara Bank issued a sanction letter for Rs. 50 crores to Birbhum Chemicals and…
- **2023-02-27 — Further Sancti…**: Canara Bank issued a further sanction letter…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14(1) — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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