# in the matter of Usha India Limited

> NCLT judgment dated 2023-10-05. Citation: TCN-2023-NCLT-01397. The Administrator of Specified Undertaking of the Unit Trust of India (SUUTI) filed an…

- **Court:** NCLT
- **Order date:** 5 Oct 2023
- **Citation:** TCN-2023-NCLT-01397
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/usha-india-limited-b3cb7365

## Summary

### Background

The Administrator of Specified Undertaking of the Unit Trust of India (SUUTI) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against M/s Usha India Limited, seeking initiation of Corporate Insolvency Proceedings. The application was filed on 2023-05-10, alleging default in payment of debentures issued by the Corporate Debtor. The Corporate Debtor had issued both secured and unsecured redeemable non-convertible debentures to raise capital in 1992, with UTI subscribing to a portion of these debentures. The Corporate Debtor defaulted on interest payments from July 1998, leading to the account being declared NPA on 1998-09-28. Despite recall notices and proceedings before the Debt Recovery Tribunal (DRT), the default continued. The

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## Facts

The Administrator of Specified Undertaking of the Unit Trust of India (SUUTI) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against M/s Usha India Limited. The application was filed on 2023-05-10. The Corporate Debtor issued secured and unsecured redeemable non-convertible debentures in 1992 to raise capital. UTI subscribed to a portion of these debentures. The Debenture Trust Deed was executed on 1996-11-08. The Corporate Debtor defaulted on interest payments from July 1998. The Financial Creditor declared the Corporate Debtor's account as NPA on 1998-09-28. The Financial Creditor issued recall notices on 2003-01-13. The Financial Creditor approached the Debt Recovery Tribunal (DRT), Mumbai, by filing an Original Application

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## Issues and analysis

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

**Ratio:** The ratio is based on Section 7(5) of the Insolvency and Bankruptcy Code, 2016, which

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**Reasoning:** The Tribunal reasoned that the Financial Creditor had filed a complete application under

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**Interpretation:** Section 7 of the IBC allows a financial creditor to initiate CIRP against a

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

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## Parties

- **Judges:** Praveen…; Ashish…
- **Appellants:** The Administrator…
- **Respondents:** M/S USHA INDIA…

## Timeline

- **1992-01-01 — Debenture I…**: Corporate Debtor issued…
- **1996-11-08 — Debenture Tru…**: Corporate Debtor and UTI…

## 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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