# In the matter of Howrah Mills Co. Limited

> NCLT judgment dated 2024-01-25. Citation: TCN-2024-NCLT-02875. The case involves an application under Section 7 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 25 Jan 2024
- **Citation:** TCN-2024-NCLT-02875
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/howrah-mills-co-limited-964695b3

## Summary

### Background

The case involves an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, filed by J.M. Financial Asset Reconstruction Company Limited (JMFARC), the Financial Creditor, against Howrah Mills Company Limited, the Corporate Debtor. JMFARC sought to initiate CIRP against Howrah Mills. Subsequently, JMFARC entered into an agreement with Abhinandan Holdings Private Limited to assign the debts of Howrah Mills. JMFARC then filed an application to withdraw the CIRP petition, which was initially allowed. However, the settlement with Abhinandan failed, leading JMFARC to file a restoration application. Howrah Mills objected to the restoration, but the Tribunal allowed it. Howrah Mills then appealed to the Appellate Tribunal, which directed the Adjudicating

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## Facts

J.M. Financial Asset Reconstruction Company Limited (JMFARC) initiated CIRP against Howrah Mills Company Limited under Section 7 of the Insolvency and Bankruptcy Code, 2016. JMFARC, as the Financial Creditor, entered into an agreement on 15.01.2020 with Abhinandan Holdings Private Limited to assign the debts of Howrah Mills. Abhinandan Holdings was to pay Rs. 26.01 crores in installments. An initial 25% (Rs. 6.50 crores) was paid. Subsequent installments were due on 31.01.2020, 29.02.2020, and 25.03.2020. Abhinandan defaulted on payments. JMFARC attempted to forfeit the money paid and cancel the agreement, but the Commercial Court issued an injunction restraining JMFARC from doing so. JMFARC then sought to restore the CIRP against Howrah Mills. The Appellate Tribunal

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 against Howrah …

**Ratio:** The assignment agreement between JMFARC and Abhinandan Holdings transfers the financial

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**Reasoning:** The court reasoned that the assignment agreement is still in force, and JMFARC cannot

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**Interpretation:** The assignment agreement effectively transfers the rights and obligations

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**Application:** Since the assignment agreement is in force and JMFARC is restrained from

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## Parties

- **Judges:** BIDISHA BA…; Balraj…
- **Respondents:** Howrah Mills…
- **Advocates:** Vikram Wa…; Indradeep…; +9 more

## Timeline

- **2016-03-30 — Assignment Ag…**: The Loan account was assigned by the Bank to JMFARC vide a registered Assignment…
- **2020-01-15 — Agreement to…**: An Agreement to assign the debts of Howrah Mills to Abhinandan was executed between…

## 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)

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