# In the matter of Keshar Multiyarn Mill Limited CP (IB) NO.885-KB-2019

> NCLT judgment dated 2022-03-08. Citation: TCN-2022-NCLT-03848. Indian Overseas Bank filed a petition under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 8 Mar 2022
- **Citation:** TCN-2022-NCLT-03848
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/keshar-multiyarn-mill-limited-cp-ib-no885-kb-2019-b04819e8

## Summary

### Background

Indian Overseas Bank filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Keshar Multiyarn Mill Limited, claiming a default on a financial debt. The Financial Creditor had sanctioned credit facilities to the Corporate Debtor, which were secured by hypothecation/mortgage of land, factory, and other assets. The Corporate Debtor's account became irregular and was classified as a Non-Performing Asset (NPA). The Financial Creditor initiated recovery proceedings before the Debt Recovery Tribunal (DRT) and also issued a demand notice under the SARFAESI Act. The Corporate Debtor disputed the claims and argued that the petition was barred by limitation.

## Facts

Indian Overseas Bank (IOB) extended credit facilities to Keshar Multiyarn Mill Limited. These facilities included cash credit and term loans, secured by hypothecation and mortgage of assets. The Corporate Debtor's account was classified as NPA on 21.12.2012, later corrected to 16.12.2013. IOB initiated recovery proceedings before the Debt Recovery Tribunal (DRT) and issued a demand notice under SARFAESI Act. The date of default was initially mentioned as 21.12.2012 in Form-1, later corrected to 16.12.2013. The loan was to be repaid in 32 quarterly installments from 01.04.2009. The Financial Creditor claimed a default of Rs. 68,29,59,978.82/-. The Corporate Debtor argued that the petition was time-barred, relying on the NPA declaration date and the DRT proceedings. The

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 is barred by …

**Ratio:** The Limitation Act, 1963, applies to applications filed under Sections 7 and 9 of the

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**Reasoning:** The NCLT observed that the date of default was initially mentioned as 21.12.2012 and

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**Interpretation:** The relevant provisions of the IBC came into force on 1st of December 2016. The

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**Application:** The NCLT found that the application was filed beyond the period of limitation,

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## Parties

- **Judges:** Rajasekha…; Balraj…
- **Appellants:** Indian Overseas…
- **Respondents:** Keshar Multiyarn…

## Timeline

- **2008-02-14 — Sanction Lett…**: Date of the sanction letter…
- **2009-04-01 — Repayment Sta…**: The loan was to be repaid in 32 quarterly…

## 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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