# In the matter of Karuturi Ceramics Private Limited

> NCLT judgment dated 2024-04-24. Citation: TCN-2024-NCLT-01627. The case pertains to a petition filed by State Bank of India (Financial Creditor) against M/s.…

- **Court:** NCLT
- **Order date:** 24 Apr 2024
- **Citation:** TCN-2024-NCLT-01627
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/karuturi-ceramics-private-limited-639acd96

## Summary

### Background

The case pertains to a petition filed by State Bank of India (Financial Creditor) against M/s. Karuturi Ceramics Private Limited (Corporate Debtor) under Section 7 of the Insolvency and Bankruptcy Code, 2016, for initiation of Corporate Insolvency Resolution Process (CIRP). The petition was filed on 26.08.2021, claiming a default of Rs. 54,78,94,954.15 as of 31.08.2018. The Corporate Debtor contested the petition, primarily on the grounds of limitation, arguing that the account was declared NPA on 24.07.2015, and the application was filed beyond the three-year limitation period. The Corporate Debtor also raised concerns about the Financial Creditor's actions, including the release of personal guarantees and alleged violations of RBI circulars.

## Facts

The State Bank of India (SBI), the Financial Creditor (FC), extended financial assistance to M/s. Karuturi Ceramics Private Limited, the Corporate Debtor (CD). The initial credit limits were sanctioned on 29.11.2010 and 13.07.2011, totaling Rs. 24.49 crores. These limits were later enhanced on 23.12.2013. A Working Capital Consortium Agreement was entered on 07.01.2014. The Corporate Debtor defaulted on payments, leading to the account being classified as a Non-Performing Asset (NPA) on 24.07.2015. The FC issued demand notices on 18.09.2020 and 22.06.2021 under the SARFAESI Act. The CD submitted One Time Settlement (OTS) proposals, which were rejected by the FC. The CD argued that the petition was barred by limitation, as the application was filed on 26.08.2021, more

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## Issues and analysis

### Issue 1: Whether the Petition is filed …

**Ratio:** Section 238-A of the IBC provides for the application of the Limitation Act, 1963, to

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**Reasoning:** The court considered the Corporate Debtor's argument that the petition was time-barred as

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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 of the case, noting that the Corporate

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## Parties

- **Judges:** Rajeev Bh…; Sanjay…
- **Appellants:** State Bank of…
- **Respondents:** M/s. Karuturi…
- **Advocates:** G.P. Yash V…; A. Sandhy…

## Timeline

- **2010-11-29 — Sanction of Credit…**: Financial Creditor issued sanction letters…
- **2011-07-13 — Sanction of Credit…**: Financial Creditor issued sanction letters…

## 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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