# In the matter of Mahakal Agro Storage & Processing Unit Private Limited CP (IB) No. 1285-KB-2019

> NCLT judgment dated 2022-05-25. Citation: TCN-2022-NCLT-02599. The case involves a petition filed by Indian Overseas Bank ('Financial Creditor') under Section…

- **Court:** NCLT
- **Order date:** 25 May 2022
- **Citation:** TCN-2022-NCLT-02599
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/mahakal-agro-storage-processing-unit-private-limited-cp-ib-no-1285-kb-2019-bb6bb665

## Summary

### Background

The case involves a petition filed by Indian Overseas Bank ('Financial Creditor') under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process ('CIRP') against Mahakal Agro Storage Processing Unit Private Limited ('Corporate Debtor'). The petition was filed due to the Corporate Debtor's default in payment of ₹15,68,12,389.14, including unapplied interest, as of July 31, 2019. The Corporate Debtor is engaged in the business of storing and preserving potatoes in cold storage and had availed credit facilities from the Financial Creditor. The Financial Creditor claims that the Corporate Debtor failed to operate the loan account as per the agreed terms, leading to the account being classified as Non-Performing

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## Facts

Indian Overseas Bank ('Financial Creditor') filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process ('CIRP') against Mahakal Agro Storage Processing Unit Private Limited ('Corporate Debtor'). The Corporate Debtor, engaged in cold storage of potatoes, had availed credit facilities from the Financial Creditor. The Corporate Debtor defaulted in payment of ₹15,68,12,389.14, including unapplied interest, as of July 31, 2019. The account was classified as Non-Performing Asset ('NPA') on March 31, 2014. The Financial Creditor issued a notice under Section 13(2) of the SARFAESI Act, 2002, and initiated proceedings before the Debt Recovery Tribunal. The Corporate Debtor executed Demand

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## Issues and analysis

### Issue 1: Whether the instant …

**Ratio:** Section 18 of the Limitation Act states that if an acknowledgment of debt takes place

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**Reasoning:** The court considered the audited balance sheets of the Corporate Debtor, which reflected

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**Interpretation:** The court interpreted that the continuous acknowledgment of debt in the balance

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**Application:** The court applied the ratio to the facts of the case, noting that even if the

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## Parties

- **Judges:** Rajasekha…; Balraj…
- **Appellants:** Indian Overseas…
- **Respondents:** Mahakal Agro…; Mahakal Agro…
- **Advocates:** Ramesh Chandra…; Akash B…; +3 more

## Timeline

- **2009-01-14 — Loan Sanc…**: Financial Creditor sanctioned…
- **2014-03-31 — Account Decla…**: The account of the Corporate Debtor was identified as Non-Performing Assets (‘NPA') on 31…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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