# In the matter of RY Midas Aluminium Private Limited

> NCLT judgment dated 2024-02-05. Citation: TCN-2024-NCLT-02776. Canara Bank filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016…

- **Court:** NCLT
- **Order date:** 5 Feb 2024
- **Citation:** TCN-2024-NCLT-02776
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/ry-midas-aluminium-private-limited-66e7a123

## Summary

### Background

Canara Bank filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) against RY Midas Alluminiums Pvt Ltd, seeking initiation of Corporate Insolvency Resolution Process (CIRP). The application was based on the corporate debtor's failure to repay outstanding dues amounting to Rs. 42.57 Crores, including interest. The corporate debtor contended that the application was barred by limitation under Section 10A of the IBC, as the default occurred during the period when IBC proceedings were suspended due to the COVID-19 pandemic.

## Facts

Canara Bank extended financial assistance to RY Midas Alluminiums Pvt Ltd, with an initial ODBT limit of Rs. 300 Lakhs sanctioned on 18.11.2009. This facility was subsequently renewed and enhanced, reaching Rs. 34.00 Crores by 30.08.2019, along with an ad-hoc limit of Rs. 4.00 Crores. RY Midas Alluminiums Pvt Ltd defaulted on repayments, leading to the account being classified as a Non-Performing Asset (NPA) on 30.03.2021. Canara Bank issued a recall notice on 26.10.2020 and later filed O.A. No. 647 of 2021 before the Debts Recovery Tribunal-I, Ahmedabad, seeking recovery of Rs. 36,71,45,718.80. Canara Bank then filed an application under Section 7 of the IBC on 06.01.2023, claiming total dues of Rs. 42.57 Crores as of 17.12.2022. The date of default was initially

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## Issues and analysis

### Issue 1: Whether the application filed by Canara Bank under Section 7 of the IBC is maintainable, …

**Ratio:** Section 10A of the IBC suspends the initiation of CIRP for defaults occurring during the

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**Reasoning:** The NCLT observed that the date of default, even if considered as the date of NPA (March

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**Interpretation:** Section 10A is interpreted to mean that no CIRP can be initiated for defaults

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**Application:** In this case, even if the date of default is considered as the date of NPA

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## Parties

- **Judges:** SHAMMI…; SAMEER…
- **Appellants:** Canara…
- **Respondents:** RY Midas Alluminiu…

## Timeline

- **2009-11-18 — Initial Sa…**: Canara Bank sanctioned ODBT limit of Rs.300…
- **2019-08-30 — Last San…**: Financial facility renewed and enhanced to Rs.34.00 Crores, along with an ad-hoc limit of…

## 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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