# In the matter of Ramnath Agro Manufacturer Private Limited CP (IB) No.190-MB-IV-2021

> NCLT judgment dated 2022-11-30. Citation: TCN-2022-NCLT-00290. Ahmednagar Merchant's Co-op. Bank Limited filed a Company Petition under Section 7 of the I&B…

- **Court:** NCLT
- **Order date:** 30 Nov 2022
- **Citation:** TCN-2022-NCLT-00290
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/ramnath-agro-manufacturer-private-limited-cp-ib-no190-mb-iv-2021-668b5604

## Summary

### Background

Ahmednagar Merchant's Co-op. Bank Limited filed a Company Petition under Section 7 of the I&B Code, 2016, against Ramnath Agro Manufacturer Private Limited, seeking to initiate Corporate Insolvency Resolution Process (CIRP). The Financial Creditor claimed a default of Rs. 12,44,06,504.01 as of 15.12.2020. The Corporate Debtor denied the allegations, contending that the Financial Creditor had acted arbitrarily and illegally. The Financial Creditor argued that the Corporate Debtor's accounts were classified as Non-Performing Assets (NPA) due to the failure to repay outstanding dues.

## Facts

Ahmednagar Merchant's Co-op. Bank Limited (Financial Creditor) filed a petition against Ramnath Agro Manufacturer Private Limited (Corporate Debtor) under Section 7 of the I&B Code, 2016, claiming a default of Rs. 12,44,06,504.01 as of 15.12.2020. The Financial Creditor is a co-operative society registered under the Maharashtra Co-operative Societies Act, 1960, and is in the banking business. The Corporate Debtor is a private limited company engaged in manufacturing and selling wheat products. The Corporate Debtor approached the Financial Creditor for various credit facilities, including cash credit and term loans, starting from 03.11.2012. The Financial Creditor sanctioned and disbursed these facilities, securing them with loan and security documents. The

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## Issues and analysis

### Issue 1: Whether the Financial Creditor has satisfied the requirements of Section 7(5)(a) of the I&B …

**Ratio:** Section 7(5)(a) of the I&B Code requires the Adjudicating Authority to be satisfied

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**Reasoning:** The NCLT found that the Financial Creditor's submissions regarding the date of default

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**Interpretation:** Section 7(5)(a) is interpreted strictly, requiring clear and unambiguous

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**Application:** In this case, the NCLT held that the Financial Creditor failed to satisfy the

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## Parties

- **Judges:** Manoj Kumar…; KISHORE VEMULAPALL…
- **Appellants:** Ahmednagar…
- **Respondents:** Ramnath Agro…

## Timeline

- **2012-11-03 — Corporate Debtor…**: The Corporate Debtor approached the Financial Creditor for grant/sanction of Cash Credit…
- **2013-03-15 — Disbursement of Credit…**: The credit facility was…

## 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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