# In the matter of Nishta Mall Management Company Private Limited

> NCLT judgment dated 2025-03-24. Citation: TCN-2025-NCLT-00327. Canara Bank filed a Company Petition under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 24 Mar 2025
- **Citation:** TCN-2025-NCLT-00327
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/nishta-mall-management-company-private-limited-1623b3de

## Summary

### Background

Canara Bank filed a Company Petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Nishta Mall Management Company Pvt. Ltd., seeking to initiate Corporate Insolvency Resolution Process (CIRP). The petition was filed due to a default on a financial debt of Rs. 170,96,81,356.18/-, with the date of default initially stated as 25.09.2020, later amended to 31.03.2022. The Corporate Debtor had taken two term loans from the Financial Creditor, and subsequently entered into a One-Time Restructuring (OTR) agreement. The Financial Creditor argued that the default under the OTR agreement constituted a fresh default, entitling them to take action. The Corporate Debtor contested the petition, arguing that the default date fell within the period prescribed

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## Facts

Canara Bank sanctioned two term loans to Nishta Mall Management Company Pvt. Ltd. for acquiring new fixed assets to be leased to Future Retail Limited and Future Lifestyle Fashion Limited. The first loan was for Rs. 200 Crores sanctioned on 19.05.2014, and the second was for Rs. 150 Crores sanctioned on 07.03.2015. Subsequently, the Corporate Debtor's account became irregular, and it was classified as a Non-Performing Asset (NPA) on 24.12.2020. The Corporate Debtor requested a realignment of its debt obligations under the RBI's One-Time Restructuring (OTR) Scheme, and a Framework Agreement was executed on 02.06.2021. The Corporate Debtor allegedly defaulted on payments under the OTR Framework Agreement starting from 31.03.2022. Canara Bank issued a recall notice and

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## Issues and analysis

### Issue 1: Whether the Company Petition filed by the Financial Creditor is maintainable under Section 7 of the …

**Ratio:** The adjudicating authority must be satisfied that a default has occurred for the

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**Reasoning:** The court found that the Financial Creditor had established the existence of a financial

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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 the ratio to the facts of the case, finding that Canara Bank

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## Parties

- **Judges:** Reeta K…; Madhu S…
- **Appellants:** Canara…
- **Respondents:** Nishta Mall…

## Timeline

- **2014-05-19 — Term Loan I Sa…**: Canara Bank sanctioned Term Loan I of Rs. 200 Crores to Nishta Mall Management Company…
- **2015-03-07 — Term Loan II S…**: Canara Bank sanctioned Term Loan II of Rs. 150 Crores to Nishta Mall Management Company…

## 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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