# In the matter of Mothers Pride Dairy India Private Limited Company Petition No. (IB)-662 (ND)-2022

> NCLT judgment dated 2023-06-12. Citation: TCN-2023-NCLT-02980. The case involves an application (IA No. 1695/2023) filed by State Bank of India (SBI) seeking…

- **Court:** NCLT
- **Order date:** 12 Jun 2023
- **Citation:** TCN-2023-NCLT-02980
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/mothers-pride-dairy-india-private-limited-company-petition-no-ib-662-nd-2022-e4d0c74a

## Summary

### Background

The case involves an application (IA No. 1695/2023) filed by State Bank of India (SBI) seeking the dismissal of a Section 7 petition (IB-662(ND)/2022) filed by Santoshi Finlease Private Limited against Mothers Pride Dairy India Private Limited, the Corporate Debtor. SBI contends that the Section 7 petition was filed with malicious and fraudulent intent. The Corporate Debtor was previously admitted into CIRP based on an application by an ex-director, but the CIRP was later set aside by NCLAT. SBI, the sole secured financial creditor, then re-initiated SARFAESI action. Santoshi Finlease claims the Corporate Debtor defaulted on a loan agreement. SBI argues that the loan agreement was a Mittal-to-Mittal transaction, as members of the Mittal family controlled both Santoshi

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## Facts

Santoshi Finlease Private Limited filed a Section 7 petition against Mothers Pride Dairy India Private Limited, claiming default on a loan agreement dated 17.08.2019. State Bank of India (SBI), the Corporate Debtor's lender, filed an application (IA No. 1695/2023) seeking dismissal of the Section 7 petition, alleging malicious and fraudulent intent. The promoters of Mothers Pride, Anant Kumar Chaudhary and Shalini Chaudhary, resigned and transferred their shares to Navneet Jain. Mothers Pride was previously admitted into CIRP based on an application by Shalini Choudhary, but the CIRP was set aside by NCLAT. SBI re-initiated SARFAESI action. The loan agreement was signed by Yug Mittal on behalf of Mothers Pride and Kriti Mittal on behalf of Santoshi Finlease. Yug Mittal

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## Issues and analysis

### Issue 1: Whether the Section 7 petition filed by Santoshi Finlease Private Limited against Mothers Pride …

**Ratio:** A Section 7 petition can be dismissed if it is found to be filed with malicious and

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**Reasoning:** The court reasons that the loan agreement was a 'Mittal-to-Mittal' transaction, as

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**Interpretation:** The court interprets Section 65 of the IBC to allow for the rejection of

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**Application:** The court applies the ratio and reasoning to the specific facts of the case,

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## Parties

- **Judges:** SH. ASHOK KUMAR…; SH. L. N.…
- **Appellants:** Santoshi Finlease…
- **Respondents:** Mothers Pride…

## Timeline

- **2018-03-14 — MOU Exec…**: A Memorandum of Understanding was executed between Mothers Dairy Fruit & Vegetable…
- **2019-07-01 — Mittal Family as…**: The Mittal Family Members became…

## 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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