# In the matter of Mothers Pride Education Personna Private Limited Company Petition No. (IB) 638(ND)-2021

> NCLT judgment dated 2023-01-04. Citation: TCN-2023-NCLT-05204. The case pertains to a Company Petition filed under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 4 Jan 2023
- **Citation:** TCN-2023-NCLT-05204
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/mothers-pride-education-personna-private-limited-company-petition-no-ib-638nd-20-8febe9b8

## Summary

### Background

The case pertains to a Company Petition filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 by Yes Bank Limited, the financial creditor, against Mothers Pride Education Personna Private Limited, the corporate debtor, for initiation of the Corporate Insolvency Resolution Process (CIRP). The applicant, Yes Bank Limited, sought to trigger CIRP due to the corporate debtor's default on loan repayments. The application was filed based on the corporate debtor's failure to repay term loans, leading to the account being declared a Non-Performing Asset (NPA).

## Facts

Yes Bank Limited, a financial creditor, filed a Company Petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Mothers Pride Education Personna Private Limited, the corporate debtor. The corporate debtor approached the financial creditor for a loan facility to refinance an existing facility. Three loan agreements were executed on 10.02.2018: Term Loan I (INR 45,600,000), Term Loan II (INR 35,550,000), and Term Loan III (INR 322,850,000), disbursed on 14.03.2018, 16.03.2018, and 18.09.2018, respectively. Due to non-payment of the term loans, Yes Bank declared the corporate debtor's account as a Non-Performing Asset (NPA) on 29.09.2019. As of 20.07.2021, the total debt due was INR 254,551,104.43. Yes Bank issued a loan recall notice demanding

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016, filed by Yes …

**Ratio:** An application under Section 7 of the IBC is maintainable if the debt is proved to be due

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**Reasoning:** The court reasoned that since the Corporate Debtor chose not to file any reply and the

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**Interpretation:** Section 7 of the IBC allows a financial creditor to initiate CIRP against a

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**Application:** The court applied this ratio to the facts by noting that the debt due from the

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## Parties

- **Judges:** P.S.N. P…; BINOD KUMAR…; +1 more
- **Appellants:** Yes Bank L…
- **Respondents:** Mothers Pride…

## Timeline

- **2003-11-21 — Company Regis…**: Yes Bank Limited registered…
- **2004-07-02 — Incorporation of…**: Mothers Pride Education Personna…

## Legal provisions

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

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