# In the matter of Laxmi OIl and Vanaspati Pvt. Ltd.

> NCLT judgment dated 2022-06-13. Citation: TCN-2022-NCLT-02261. Yes Bank Ltd. filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 13 Jun 2022
- **Citation:** TCN-2022-NCLT-02261
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/laxmi-oil-and-vanaspati-pvt-ltd-40510db1

## Summary

### Background

Yes Bank Ltd. filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against Laxmi Oil and Vanaspati Pvt. Ltd. The financial creditor, Yes Bank Ltd., had sanctioned a cash credit limit of ₹10 crore to the corporate debtor, Laxmi Oil and Vanaspati Pvt. Ltd., which was later extended and increased. The corporate debtor defaulted on its repayment obligations, leading to the declaration of NPA and the subsequent filing of the application.

## Facts

Yes Bank Ltd. sanctioned a cash credit limit of ₹10 crore to Laxmi Oil and Vanaspati Pvt. Ltd. under a master facility agreement dated 2017-03-29. This limit was initially set to expire on 2018-03-15. Subsequently, on 2018-02-15, another facility letter was executed, extending the facility's date to 2019-01-20 and increasing the monetary limit to ₹20 crore via a facility letter dated 2019-07-24. This credit limit was available until 2019-01-22 and was further renewed for one year. However, Laxmi Oil and Vanaspati Pvt. Ltd. failed to adhere to the terms and conditions and defaulted on interest payments. The plants became inoperative in May 2019. On 2019-12-20, Yes Bank Ltd. requested Laxmi Oil and Vanaspati Pvt. Ltd. to comply with the facility agreements, but the

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## Issues and analysis

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

**Ratio:** Section 10A of the Insolvency and Bankruptcy Code, 2016, prohibits the initiation of

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**Reasoning:** The NCLT reasoned that the financial creditor's claimed date of default, 28.02.2020, was

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**Interpretation:** Section 10A of the IBC is interpreted to provide relief to corporate debtors

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**Application:** In this case, the NCLT found that the default occurred during the period

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## Parties

- **Judges:** SH. RAJASEKHAR…; SH. VIRENDRA…
- **Appellants:** Yes Bank…
- **Respondents:** Laxmi Oil and…

## Timeline

- **2017-03-29 — Cash Credit Limit…**: Yes Bank Ltd. sanctioned a cash credit limit of ₹10 crore to Laxmi Oil and Vanaspati Pvt.…
- **2018-02-15 — Facility Letter…**: Another facility letter was executed, extending the facility's date and increasing the…

## 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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