# In the matter of Magnifico Mineral Private Limited

> NCLT judgment dated 2024-08-07. Citation: TCN-2024-NCLT-00856. Central Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 7 Aug 2024
- **Citation:** TCN-2024-NCLT-00856
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/magnifico-mineral-private-limited-28949c77

## Summary

### Background

Central Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Magnifico Minerals Private Limited for initiating the Corporate Insolvency Resolution Process (CIRP). The application was filed due to a financial default of Rs. 175,96,47,674/- as on 22.03.2024. The Corporate Debtor (CD) had availed credit facilities from a consortium of banks, including the Applicant Bank, with Bank of India as the Lead Bank. The CD defaulted on payments, leading to the account being declared NPA. Despite settlement proposals and notices under the SARFAESI Act, the default remained unresolved, prompting the filing of the CIRP application.

## Facts

Central Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Magnifico Minerals Private Limited. The application was filed on 08.04.2024 due to a financial default of Rs. 175,96,47,674/- as on 22.03.2024. Magnifico Minerals Private Limited had availed credit facilities, including CC cum OD and ILC/FLC/BG/LOU-LOC, totaling Rs. 100 crore, from a consortium of banks. The Corporate Debtor executed a loan document on 25.06.2013 in favor of the Consortium of Banks. The CD defaulted on payments, and the account was declared NPA on 02.05.2019. The Petitioner issued a notice under Section 13(2) of the SARFAESI Act, 2002. The Corporate Debtor admitted to the default in payment of the loan.

## Issues and analysis

### Issue 1: Whether the application filed by Central Bank of India under Section 7 of the Insolvency and …

**Ratio:** Section 7 of the Insolvency and Bankruptcy Code, 2016, allows a financial creditor to

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**Reasoning:** The court considered the documents submitted, including the Form-1, loan documents,

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**Interpretation:** Section 7 of the IBC provides a mechanism for financial creditors to recover

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**Application:** In this case, Central Bank of India, being a financial creditor, filed an

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## Parties

- **Judges:** Ramalingam…; Sh. Avinash K.…
- **Appellants:** Central Bank of…
- **Respondents:** Magnifico…

## Timeline

- **2011-12-16 — Date of Incor…**: Magnifico Minerals Private…
- **2013-06-25 — Loan Document…**: The Corporate Debtor executed the loan…

## 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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