# In the matter of Mothers Pride Education Institution Private Limited (IB)-21(ND)-2022

> NCLT judgment dated 2022-10-11. Citation: TCN-2022-NCLT-00780. Yes Bank Limited filed an application under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 11 Oct 2022
- **Citation:** TCN-2022-NCLT-00780
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/mothers-pride-education-institution-private-limited-ib-21nd-2022-d1fc78ba

## Summary

### Background

Yes Bank Limited filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against Mothers Pride Education Institution Private Limited. The application was based on the grounds of unpaid financial debt. Yes Bank claimed that Mothers Pride defaulted on loan repayments, leading to the account being declared a Non-Performing Asset (NPA). The total claim amounted to INR 1,095,657,864.76 as of July 20, 2021. Mothers Pride contested the application, arguing that there was a dispute, no demand notice was served, and Yes Bank had assigned a substantial part of the debt to Aditya Birla Finance Limited (ABFL).

## Facts

Yes Bank Limited (YBL) extended loan facilities to Mothers Pride Education Institution Private Limited (MPEIPL) for refinancing existing facilities and expansion of schools. Three term loans were executed on February 10, 2018: Term Loan I (Rs. 45,600,000), Term Loan II (Rs. 35,550,000), and Term Loan III (Rs. 3,22,850,000). YBL declared MPEIPL's account as a Non-Performing Asset (NPA) on September 29, 2019, due to non-payment of the term loans. As of July 20, 2021, the total debt due was Rs. 10,86,86,870.10. YBL assigned a portion of its loan facility (Rs. 8,50,00,000) to Aditya Birla Finance Limited (ABFL) via a novation cum Assignment Agreement dated August 28, 2018. After the assignment, YBL's exposure reduced to Rs. 8,60,00,000. YBL issued a loan recall notice on

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the IBC is maintainable despite the existence of a …

**Ratio:** As per the Scheme of the IBC 2016, although the 'dispute' can be a ground to seek

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**Reasoning:** The NCLT observed that while a dispute can be a ground for dismissal under Section 9, it

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**Interpretation:** The interpretation is that the existence of a dispute is not a bar to the

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**Application:** The NCLT rejected the Respondent's contention that the existence of a dispute

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## Parties

- **Judges:** SH. BACHU VENKAT…; SH. L. N.…
- **Appellants:** Yes Bank L…
- **Respondents:** Mothers Pride…

## Timeline

- **2017-12-30 — Sanction o…**: Yes Bank sanctioned the loan to Mothers Pride…
- **2018-02-10 — Loan Agreements…**: Three loan agreements were executed between Yes Bank and Mothers Pride Education…

## 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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