# In the matter of Motijug Agencies Limited & Machine Works (International) Limited

> NCLT judgment dated 2025-01-08. Citation: TCN-2025-NCLT-00653. The case involves two company petitions, CP(IB) No. 91/KB/2022 and CP(IB) No. 200/KB/2022,…

- **Court:** NCLT
- **Order date:** 8 Jan 2025
- **Citation:** TCN-2025-NCLT-00653
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/motijug-agencies-limited-machine-works-international-limited-efb413f9

## Summary

### Background

The case involves two company petitions, CP(IB) No. 91/KB/2022 and CP(IB) No. 200/KB/2022, filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, by CFM Asset Reconstruction Pvt. Ltd. (substituted for Indian Bank) against Motijug Agencies Limited and Machine Works (International) Limited, respectively. These petitions relate to the corporate guarantees provided by Motijug and Machine Works for the principal borrower, Ural India Limited (UIL), which is undergoing liquidation. The financial creditor seeks to initiate Corporate Insolvency Resolution Process (CIRP) against the corporate guarantors due to the default in repayment of loans by UIL.

## Facts

On 15.09.2010, Allahabad Bank sanctioned a term loan to Ural India Limited (UIL) for Rs. 27 crores. Enhanced credit limits were granted to UIL on 12.10.2010, secured by personal and corporate guarantees from J.K. Saraff, Anirudh Kanoi, Machine Works (International) Limited, and Motijug Agencies Limited. On 18.05.2012, UIL requested restructuring of the loan account, and the financial creditor sanctioned an aggregate limit of Rs. 28.31 Crores. Machine Works and Motijug furnished personal guarantees for the repayment of loans to UIL. The loan account of UIL was classified as NPA on 12.07.2014. A notice under Section 13(2) of the SARFAESI Act, 2002, was issued on 31.07.2014 to the borrower and guarantors. UIL's CIRP commenced on 15.10.2019, and liquidation proceedings

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## Issues and analysis

### Issue 1: Whether the petitions are …

**Ratio:** Section 18 of the Limitation Act allows for the extension of the limitation period based

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**Reasoning:** The NCLT found that the principal borrower had acknowledged its liabilities in the

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**Interpretation:** The acknowledgment of debt by the principal borrower in its balance sheets and

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**Application:** The court applied the ratio to the facts by noting that the acknowledgments in

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## Parties

- **Judges:** BIDISHA BA…; SHRI. D.A…
- **Appellants:** CFM Asset…
- **Respondents:** Machine Works…; Motijug Agencies…
- **Advocates:** Siddharth…; Pradip Sa…; +6 more

## Timeline

- **2010-09-15 — Sanction of T…**: Allahabad Bank sanctioned a term loan to…
- **2010-10-12 — Enhanced Credi…**: Enhanced credit limits granted to UIL along with future costs, expenses, etc., were…

## 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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