# In the matter of J M Feed Mills Pvt. Ltd. CP (IB) No.27-Chd-Hry-2019

> NCLT judgment dated 2023-01-10. Citation: TCN-2023-NCLT-05119. Bank of Baroda (erstwhile Dena Bank) filed a petition under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 10 Jan 2023
- **Citation:** TCN-2023-NCLT-05119
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/j-m-feed-mills-pvt-ltd-cp-ib-no27-chd-hry-2019-0091e278

## Summary

### Background

Bank of Baroda (erstwhile Dena Bank) filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against JM Feed Mills Private Limited. The Corporate Debtor approached the Financial Creditor in December 2011 and sought loan facilities. A sanction letter dated 29.12.2011 was issued, whereby a CC limit of Rs. 9.8 Crores was sanctioned in favour of the corporate debtor. The corporate debtor duly executed various agreements/undertakings creating charges over various properties. The corporate debtor gradually failed to adhere to the loan repayment schedule and was declared Non-Performing Asset

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## Facts

Bank of Baroda (erstwhile Dena Bank) filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate CIRP against JM Feed Mills Private Limited. The corporate debtor had approached the financial creditor in December 2011 for loan facilities. A CC limit of Rs. 9.8 Crores was sanctioned on 29.12.2011. The corporate debtor failed to adhere to the repayment schedule and was declared a Non-Performing Asset on 31.12.2015. A loan restructuring was sanctioned on February 20, 2018, but the corporate debtor did not comply with the restructured schedule. The financial creditor also initiated action under Section 13(4) of the SARFAESI Act. The total debt amount was Rs. 13.18 Crores. The petition was filed on 18.12.2018.

## Issues and analysis

### Issue 1: Whether the pendency of actions under the SARFAESI Act creates an obstruction for filing an …

**Ratio:** The pendency of actions under the SARFAESI Act or actions under RDB Act does not create

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**Reasoning:** The Hon'ble NCLAT held that simply because the financial creditor had initiated parallel

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**Interpretation:** Section 238 of the IBC has a non-obstante clause, meaning it overrides any

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**Application:** The court applied the ratio to the present case, stating that the invocation of

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## Parties

- **Judges:** Harnam Singh…; SUBRATA KUM…
- **Appellants:** Bank of B…
- **Respondents:** JM Feed Mills…; M/s. JM Feed Pvt.…
- **Advocates:** Ajay Pal…; Diwan S…

## Timeline

- **2011-12-01 — Corporate Debtor…**: The Corporate Debtor approached the Financial Creditor in December 2011 and sought loan…
- **2011-12-29 — Sanction Lette…**: A sanction letter dated 29.12.2011 was issued, whereby a CC limit of Rs. 9.8 Crores was…

## 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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