# In the matter of Shubhada Tool Industries Private Limited

> NCLT judgment dated 2025-01-17. Citation: TCN-2025-NCLT-00612. The case pertains to a Company Petition (IB) No. 729/MB/2022 filed by Cosmos Co-Operative Bank…

- **Court:** NCLT
- **Order date:** 17 Jan 2025
- **Citation:** TCN-2025-NCLT-00612
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/shubhada-tool-industries-private-limited-0eadd313

## Summary

### Background

The case pertains to a Company Petition (IB) No. 729/MB/2022 filed by Cosmos Co-Operative Bank Limited (Financial Creditor) under Section 7 of the Insolvency and Bankruptcy Code, 2016, read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, for initiating Corporate Insolvency Resolution Process (CIRP) against Shubhada Tool Industries Private Limited (Corporate Debtor). The financial creditor claimed a default of Rs. 37,59,92,550.55 as of 04.02.2022, including interest and legal expenses, based on loan defaults amounting to Rs. 43,45,00,000 sanctioned between 09.06.2014 and 16.03.2017. The Corporate Debtor's loan accounts were classified as Non-Performing Assets (NPA) on 31.10.2017.

## Facts

Cosmos Co-Operative Bank Limited, a Multi-State Banking Institution, extended credit facilities to Shubhada Tool Industries Private Limited, a private company engaged in manufacturing agricultural equipment. The total default amount was Rs. 37,59,92,550.55 as of 04.02.2022, including interest and legal expenses. The loans, totaling Rs. 43,45,00,000, were sanctioned between 09.06.2014 and 16.03.2017. The Corporate Debtor's loan accounts were classified as NPA on 31.10.2017. The Financial Creditor submitted statements of accounts, composite deeds of mortgage, demand promissory notes, deeds of guarantee, and continuing security letters. The Corporate Debtor sought restructuring of its credit facilities, leading to a Restructuring Agreement dated 31.03.2018. The Financial

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## Issues and analysis

### Issue 1: Whether the present Application is …

**Ratio:** The limitation period for filing an application under Section 7 of the IBC is three years

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**Reasoning:** The Adjudicating Authority observed that the actual date of default was 31.07.2017, and

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**Interpretation:** The Supreme Court's decision in In Re: Cognizance for Extension of Limitation

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**Application:** Applying the Supreme Court's decision, the Adjudicating Authority excluded the

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## Parties

- **Judges:** K. R. SAJI…; SANJIV…
- **Appellants:** Cosmos Co-operativ…
- **Respondents:** Shubhada Tool…

## Timeline

- **2014-06-09 — Loan San…**: Financial Creditor sanctioned loans to Corporate…
- **2017-03-16 — Loan San…**: Financial Creditor sanctioned loans to Corporate…

## 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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