# In the matter of Shree Basaveshwar Sugars Ltd.

> NCLT judgment dated 2024-01-10. Citation: TCN-2024-NCLT-03207. Canara Bank filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to…

- **Court:** NCLT
- **Order date:** 10 Jan 2024
- **Citation:** TCN-2024-NCLT-03207
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/shree-basaveshwar-sugars-ltd-ce0a2681

## Summary

### Background

Canara Bank filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against M/S Shree Basaveshwara Sugars LTD, citing a default of Rs 1,61,55,37,601.82 as of 31/01/2016. The Corporate Debtor had obtained a term loan facility of Rs 50 Crores in 2010 for establishing an integrated sugar mill. Restructuring of the facilities was done later, and the Corporate Debtor executed debt restructuring agreements. The Financial Creditor issued a demand notice under Section 13(2) of the SARFEASI Act. The Corporate Debtor had also submitted an Offer Letter for One Time Settlement. The Respondents contended that the application was barred by limitation and that the Applicant was attempting to recover

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## Facts

Canara Bank, the Financial Creditor, filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/S Shree Basaveshwara Sugars LTD, the Corporate Debtor. The petition was filed on 16/05/2023. The Corporate Debtor is a public unlisted company incorporated on 10/01/2001 and is engaged in the business of manufacturing sugars, herbs, spices, coconut, oils, pulses, grains, and related food commodities. The default amount was Rs 1,61,55,37,601.82 as on 31/01/2016. The Corporate Debtor had obtained a term loan facility of Rs 50 Crores in 2010 for establishing an integrated sugar mill. The Corporate Debtor sought restructuring of the facilities, and debt restructuring agreements were executed.

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## Issues and analysis

### Issue 1: Whether the application filed under Section 7 of …

**Ratio:** The judgment in Dena Bank v. C. Shivakumar Reddy (2021) 10 SCC 330, established that a

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**Reasoning:** The court considered the memo filed by the Applicant, which stated that the Corporate

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**Interpretation:** Section 18 of the Limitation Act provides that an acknowledgment of debt

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**Application:** The Corporate Debtor's OTS proposal revived the limitation period. The Company

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## Parties

- **Judges:** K. Bi…; Manoj Kumar…
- **Appellants:** Canara…
- **Respondents:** M/S Shree…

## Timeline

- **2001-01-10 — Incorporation of…**: M/S Shree Basaveshwara Sugars Ltd…
- **2010-12-29 — Sanction of Term Loan…**: Corporate Debtor obtained Term…

## 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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