# In the matter of Sri Ananda lakshmi Narasimha Industries India Private Limited CP (IB)-82-7-AMR-2022

> NCLT judgment dated 2023-03-20. Citation: TCN-2023-NCLT-04137. The Central Bank of India, acting as the Financial Creditor (FC), initiated Corporate…

- **Court:** NCLT
- **Order date:** 20 Mar 2023
- **Citation:** TCN-2023-NCLT-04137
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/sri-ananda-lakshmi-narasimha-industries-india-private-limited-cp-ib-82-7-amr-202-aa66bd32

## Summary

### Background

The Central Bank of India, acting as the Financial Creditor (FC), initiated Corporate Insolvency Resolution Process (CIRP) against Sri Ananda Lakshmi Narasimha Industries India Private Limited, the Corporate Debtor (CD), due to a default of Rs. 33,93,23,650.15 as of 04.08.2020, including interest. The CD had approached the FC for credit facilities to construct a rice mill, which was sanctioned. The CD availed credit facilities, becoming irregular in payments and defaulting. The FC recalled the facilities, but the CD failed to honor the dues. The FC then approached the Debt Recovery Tribunal (DRT). The CD proposed multiple One Time Settlement (OTS) offers, which were rejected by the FC. The DRT directed the CD to pay the outstanding amount. Despite the decree, the CD

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## Facts

The Central Bank of India (Financial Creditor) sanctioned credit facilities to Sri Ananda Lakshmi Narasimha Industries India Private Limited (Corporate Debtor) for constructing a rice mill. The initial term loan was INR 12.25 Crores sanctioned on 06.03.2013. Additional facilities, including Cash Credit and Term Loan, were sanctioned on 28.03.2014. The Corporate Debtor executed various agreements, including Loan Cum Hypothecation Agreements and guarantees. The Corporate Debtor defaulted on payments, leading the Financial Creditor to recall the facilities on 17.03.2020, demanding INR 32,34,97,219.64. The Corporate Debtor proposed multiple One Time Settlement (OTS) offers, which were rejected by the Financial Creditor. The Debt Recovery Tribunal (DRT), Hyderabad, ordered

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## Issues and analysis

### Issue 1: Whether the petition filed by the Financial Creditor under Section 7 of the Insolvency and …

**Ratio:** Section 7 of the Insolvency and Bankruptcy Code, 2016 allows a Financial Creditor to

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**Reasoning:** The court considered the facts presented, including the loan agreements, defaults, and

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**Interpretation:** Section 7 of the IBC provides the legal basis for a financial creditor to

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**Application:** The Financial Creditor demonstrated the existence of a debt and a default by

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## Parties

- **Judges:** TELAPROLU…
- **Appellants:** Central Bank of…
- **Respondents:** Ananda Lakshmi…

## Timeline

- **2013-03-06 — Sanction of T…**: Financial Creditor sanctioned a Term Loan of…
- **2014-03-28 — Sanction of Additional…**: Financial Creditor sanctioned additional facilities, including Cash Credit and Term Loan,…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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