# In the matter of Midas Petrochem Private Limited

> NCLT judgment dated 2025-01-13. Citation: TCN-2025-NCLT-00630. Axis Bank Limited filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 13 Jan 2025
- **Citation:** TCN-2025-NCLT-00630
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/midas-petrochem-private-limited-da38ba7c

## Summary

### Background

Axis Bank Limited filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Midas Petrochem Private Limited, seeking to initiate Corporate Insolvency Resolution Process (CIRP) due to a default amount of Rs. 32,24,43,542.14 as of 31.07.2023. The Corporate Debtor had availed various credit facilities from the Financial Creditor, including cash credit facilities, inland and foreign letters of credit, and working capital demand loans. These facilities were later enhanced and renewed. The Corporate Debtor also availed an additional credit facility under the Emergency Credit Line Guarantee Scheme (ECLGS). The Corporate Debtor defaulted on repaying the outstanding amount, leading to its account being classified as a Non-Performing Asset (NPA). The

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## Facts

Axis Bank Limited, the Financial Creditor, filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Midas Petrochem Private Limited, the Corporate Debtor, seeking to initiate Corporate Insolvency Resolution Process (CIRP). The Corporate Debtor availed various credit facilities from the Financial Creditor, including cash credit facilities, inland and foreign letters of credit, and working capital demand loans. These facilities were later enhanced and renewed. The Corporate Debtor also availed an additional credit facility under the Emergency Credit Line Guarantee Scheme (ECLGS). The total default amount was Rs. 32,24,43,542.14 as of 31.07.2023. The Corporate Debtor defaulted on repaying the outstanding amount, leading to its account being

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## Issues and analysis

### Issue 1: Whether there…

**Ratio:** The existence of a financial debt is a prerequisite for initiating CIRP under Section 7

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**Reasoning:** The Adjudicating Authority noted that the Corporate Debtor had approached Yes Bank and

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**Interpretation:** The term 'debt' is interpreted broadly to include any financial obligation owed

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**Application:** The Corporate Debtor had availed various credit facilities from the Financial

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## Parties

- **Judges:** LAKSHMI G…; Charanjeet Singh…
- **Appellants:** Axis Bank L…
- **Respondents:** Midas Petrochem…

## Timeline

- **2016-09-12 — Sanction of Cash Credit…**: Axis Bank sanctioned cash credit facilities to Midas Petrochem Private Limited totaling…
- **2016-09-20 — Sanction of Enhanced…**: Axis Bank sanctioned enhanced cash credit facilities to Midas Petrochem Private Limited…

## 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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