# In the matter of Uniworth Textiles Limited

> NCLT judgment dated 2024-11-14. Citation: TCN-2024-NCLT-00238. The case involves a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, filed…

- **Court:** NCLT
- **Order date:** 14 Nov 2024
- **Citation:** TCN-2024-NCLT-00238
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/uniworth-textiles-limited-24f833e0

## Summary

### Background

The case involves a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, filed by Asset Reconstruction Company (India) Limited (ARCIL) against Uniworth Textiles Limited, the Corporate Debtor. The petition, Company Petition (IB) No. 1593/KB/2018, was initially dismissed by the Adjudicating Authority as time-barred. However, the NCLAT reversed this order, remanding the case back to the Adjudicating Authority for a decision on the merits of the application. The Corporate Debtor had initiated proceedings under the Sick Industrial Companies (Special Provisions) Act, 1985, before the Board for Industrial and Final Reconstruction (BIFR) in 2004 due to erosion of its net worth. ICICI Bank Ltd. and Industrial Finance Corporation of India Limited had sanctioned

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## Facts

In 1992, ICICI Bank Ltd. and Industrial Finance Corporation of India Limited sanctioned loan facilities to Uniworth Textiles Ltd. In 2004, proceedings under the Sick Industrial Companies (Special Provisions) Act, 1985, were initiated by the Corporate Debtor before the Board for Industrial and Final Reconstruction (BIFR). Vide Deed of Assignment dated 31.03.2004 and 12.01.2007, ICICI and IFCI Ltd. respectively assigned the loan account of the Corporate Debtor to Asset Reconstruction Company (India) Limited (ARCIL). The account of Corporate Debtor was declared as NPA on 31/08/2007. On 20.11.2007, ARCIL issued a Demand Notice under Section 13(2) of SARFAESI Act to the Corporate Debtor. Subsequently, ARCIL issued a notice under Section 13(4) of the SARFAESI Act and took

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## Issues and analysis

### Issue 1: Whether the application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, is …

**Ratio:** Section 18 of the Limitation Act provides for the extension of the limitation period in

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**Reasoning:** The court relied on the NCLAT's observation that the Corporate Debtor had acknowledged

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**Interpretation:** The court interpreted Section 18 of the Limitation Act and Section 25(3) of the

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**Application:** The court applied the ratio to the facts of the case, noting that the Corporate

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## Parties

- **Judges:** BIDISHA BA…; Balraj…
- **Appellants:** Asset Reconstructi…
- **Respondents:** Uniworth Textiles…
- **Advocates:** Ratnankor B…; Kuldip Ma…; +6 more

## Timeline

- **1992-01-01 — Loan San…**: ICICI Bank Ltd. and Industrial Finance Corporation of India Limited sanctioned loan…
- **2004-01-01 — SICA Proce…**: Proceedings under the Sick Industrial Companies (Special Provisions) Act, 1985, were…

## 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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