# In the matter of Manali Sugars Ltd. IA-224-2022 in C.P.(IB)-35-BB-2021

> NCLT judgment dated 2022-10-18. Citation: TCN-2022-NCLT-00709. The case involves an application filed by IFCI Ltd., a financial creditor, under Section 60(5)…

- **Court:** NCLT
- **Order date:** 18 Oct 2022
- **Citation:** TCN-2022-NCLT-00709
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/manali-sugars-ltd-ia-224-2022-in-cpib-35-bb-2021-9f06f758

## Summary

### Background

The case involves an application filed by IFCI Ltd., a financial creditor, under Section 60(5) of the Insolvency and Bankruptcy Code, 2016. IFCI Ltd. is aggrieved by the Resolution Professional's (RP) decision to classify Respondents 2 to 5 as Secured Financial Creditors instead of Unsecured Financial Creditors. IFCI had provided a secured loan to the Corporate Debtor, Manali Sugars Ltd., and claims a pari-pasu first charge on the debtor's assets. Disputes arose regarding the validity and priority of charges created by the Corporate Debtor, particularly concerning the absence of NoC from prior secured lenders for subsequent charges.

## Facts

IFCI Ltd. provided a secured loan of Rs. 7,24,86,000 to Manali Sugars Ltd. (Corporate Debtor) based on a sanction letter dated 2012-08-14, creating a pari-pasu first charge on fixed and movable assets. The Corporate Debtor executed a Deed of Hypothecation on 2013-08-12 in favor of IFCI. The loan was disbursed on 2013-08-12. The Tripartite Agreement dated 2013-03-15 stipulated that the Borrower (Corporate Debtor) could not create further charges without prior written approval. The Corporate Debtor defaulted in repayment, leading IFCI to issue a Loan Recall Notice on 2019-02-14. IFCI filed an application before the Debts Recovery Tribunal-2 at Bengaluru on 2019-06-18. The Corporate Debtor was admitted into CIRP on 2021-03-22. During a CoC meeting on 2021-09-17, concerns

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## Issues and analysis

### Issue 1: Whether the Resolution Professional (RP) correctly classified Respondents 2 to 5 as Secured …

**Ratio:** The legal principle revolves around the priority of charges and the validity of

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**Reasoning:** The court reasoned that the Applicant's claim is valid because the agreement was executed

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**Interpretation:** The interpretation involves understanding the terms of the loan agreement, the

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**Application:** The court applied the ratio to the specific facts by acknowledging that IFCI's

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## Parties

- **Judges:** KISHORE VEMULAPALL…; Satya Ranjan…
- **Appellants:** IFCI…
- **Respondents:** Manali Suga…; Kondisetty Kumar…

## Timeline

- **2012-08-14 — Sanction Lett…**: IFCI Ltd. issued a sanction letter for a…
- **2013-03-15 — Tripartite Agreement…**: A Tripartite Agreement was executed, stipulating that the Borrower could not create…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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