# In the matter of Mayur Ply Industries Private Limited CP(IB) No. 1144-KB-2020

> NCLT judgment dated 2022-09-12. Citation: TCN-2022-NCLT-01094. UCO Bank filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against…

- **Court:** NCLT
- **Order date:** 12 Sept 2022
- **Citation:** TCN-2022-NCLT-01094
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/mayur-ply-industries-private-limited-cpib-no-1144-kb-2020-5907ffb2

## Summary

### Background

UCO Bank filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Mayur Ply Industries Private Limited, seeking to initiate Corporate Insolvency Resolution Process (CIRP). The financial creditor, UCO Bank, claimed that the corporate debtor defaulted on credit facilities sanctioned since June 2004, including cash credit, letter of credit, and bank guarantee facilities. The corporate debtor contested the application, raising issues regarding the validity of the power of attorney, limitation, and the classification of the account as a Non-Performing Asset (NPA).

## Facts

UCO Bank sanctioned credit facilities to Mayur Ply Industries Private Limited starting in June 2004, including cash credit, letter of credit, and bank guarantee facilities, totaling ₹9,05,00,000. The facilities were enhanced over time, reaching ₹16,78,00,000 by September 2005 and ₹38,40,000 by February 2008. In September 2008, State Bank of India sanctioned additional credit facilities of ₹19,00,00,000, leading to a consortium arrangement. The Corporate Debtor started defaulting on interest payments, and the account was declared an NPA on 31st May 2017. The total amount claimed by UCO Bank as of 31st July 2020 was ₹58,16,00,000. The Corporate Debtor confirmed the balance due on 18th April 2016. UCO Bank filed a petition under Section 7 of the IBC to initiate CIRP. The

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## Issues and analysis

### Issue 1: Whether the application filed by UCO Bank under Section 7 of the Insolvency and Bankruptcy Code, …

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

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**Reasoning:** The NCLT found that the Financial Creditor had established a default by the Corporate

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**Interpretation:** Section 7 provides the mechanism for financial creditors to trigger the

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**Application:** The NCLT applied Section 7 to the facts of the case, finding that UCO Bank had

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## Parties

- **Judges:** RohitKa…; Balraj…
- **Appellants:** UCO B…
- **Respondents:** Mayur Ply…
- **Advocates:** Rishav Ba…; Rahul A…; +6 more

## Timeline

- **2004-06-01 — Credit Facilities…**: UCO Bank sanctioned cash credit, letter of credit, and bank guarantee facilities to Mayur…
- **2005-09-12 — Enhancement of Credit…**: UCO Bank enhanced the cash…

## 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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