# In the matter of Limtex Tea & Industries Limited IVN.P (IBC) No. 5-KB-2022 in CP (IB) No. 1929-KB-2019

> NCLT judgment dated 2022-06-07. Citation: TCN-2022-NCLT-02362. The case involves a petition filed by UCO Bank, the Financial Creditor, under Section 7 of the…

- **Court:** NCLT
- **Order date:** 7 Jun 2022
- **Citation:** TCN-2022-NCLT-02362
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/limtex-tea-industries-limited-ivnp-ibc-no-5-kb-2022-in-cp-ib-no-1929-kb-2019-50291bbb

## Summary

### Background

The case involves a petition filed by UCO Bank, the Financial Creditor, under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Limtex Tea & Industries Limited, the Corporate Debtor, for initiation of Corporate Insolvency Resolution Process (CIRP). The petition was filed due to outstanding dues of ₹11,35,20,263.07 as of September 30, 2019. The Corporate Debtor's account was declared as Non-Performing Asset (NPA) on October 31, 2016, with the first default in servicing of interest occurring on July 31, 2016. The State Bank of India (SBI), part of the consortium arrangement, assigned its rights and interests to CFM Asset Reconstruction Private Limited. An intervention petition was filed by CFM Asset Reconstruction Private Limited.

## Facts

UCO Bank, the Financial Creditor, filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Limtex Tea & Industries Limited, the Corporate Debtor, due to outstanding dues of ₹11,35,20,263.07 as of September 30, 2019. The first default in servicing of interest occurred on July 31, 2016. The Corporate Debtor's account was classified as NPA on October 31, 2016. The Financial Creditor, under a consortium arrangement with SBI, had advanced a credit facility with a cash limit of Rs.750 Lakh to the Corporate Debtor. The Corporate Debtor executed several documents, including a Promissory Note for Rs.7,50,00,000/-, Letter of waiver, Letter of Continuity, and agreements for hypothecation of goods, book debts, tea crop, and movable plant &

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## Issues and analysis

### Issue 1: Whether the application is …

**Ratio:** The limitation period for filing an application under Section 7 of the IBC is three years

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**Reasoning:** The court noted that the application was filed on November 14, 2019, and the first

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**Interpretation:** The court interpreted the provisions of the Limitation Act, 1963, in

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**Application:** The court applied the limitation period of three years to the facts of the

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## Parties

- **Judges:** Rajasekha…; Balraj…
- **Appellants:** UCO B…
- **Respondents:** Limtex Tea &…

## Timeline

- **2016-05-31 — Corporate Debtor…**: Corporate Debtor defaulted in payment of…
- **2016-07-31 — First De…**: First default in servicing of interest by the Corporate Debtor (as per the Financial…

## 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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