# In the matter of Central Departmental Stores Private Limited

> NCLT judgment dated 2024-09-05. Citation: TCN-2024-NCLT-00668. The case involves an application filed by Central Bank of India under Section 7 of the…

- **Court:** NCLT
- **Order date:** 5 Sept 2024
- **Citation:** TCN-2024-NCLT-00668
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/central-departmental-stores-private-limited-d2de7f18

## Summary

### Background

The case involves an application filed by Central Bank of India under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) to initiate Corporate Insolvency Resolution Process (CIRP) against Central Departmental Stores Private Limited, the corporate guarantor for Syntex Trading and Agency Private Limited (Principal Borrower). The application was challenged by Central Departmental Stores Private Limited primarily on the ground that the default occurred during the period specified under Section 10A of the IBC, which prohibits initiation of CIRP for defaults occurring between March 25, 2020, and March 24, 2021. The financial creditor claimed default as of March 31, 2022, following a restructuring agreement (OTR) that was not honored by the principal borrower. The

…

## Facts

Central Bank of India (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) to initiate Corporate Insolvency Resolution Process (CIRP) against Central Departmental Stores Private Limited (Corporate Debtor), who acted as a corporate guarantor for Syntex Trading and Agency Private Limited (Principal Borrower). The alleged default amount was Rs.420,13,90,040.33/- as of May 29, 2022. The Principal Borrower had committed an initial default on September 30, 2020, and its loan account was classified as NPA on December 29, 2020. The Principal Borrower requested a One-Time Restructuring (OTR) under the RBI Covid Circular, which was approved, and a Restructuring Agreement was executed on May 21, 2021. The Corporate Debtor

…

## Issues and analysis

### Issue 1: Whether the application under Section 7 of the IBC is maintainable against the Corporate Debtor, …

**Ratio:** Section 10A of the IBC prohibits the initiation of CIRP for defaults occurring during the

…

**Reasoning:** The NCLT reasoned that the default occurred on March 31, 2022, under the restructured

…

**Interpretation:** The interpretation of Section 10A focuses on the date of default. If the

…

**Application:** In this case, the initial default occurred within the Section 10A period, but

…

## Parties

- **Judges:** K. R. SAJI…; SANJIV…
- **Respondents:** Central Department…; Central Bank of…

## Timeline

- **2020-03-25 — Section 10A of IBC in…**: Section 10A of the IBC comes into effect, prohibiting initiation of CIRP for defaults…
- **2020-09-30 — Initial D…**: The Principal Borrower committed an…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/central-departmental-stores-private-limited-d2de7f18