# In the matter of Vidarbha Sugar Mills Private Limited

> NCLT judgment dated 2025-02-07. Citation: TCN-2025-NCLT-00511. The case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 7 Feb 2025
- **Citation:** TCN-2025-NCLT-00511
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/vidarbha-sugar-mills-private-limited-4d819851

## Summary

### Background

The case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 by Omkara Assets Reconstruction Private Limited, the Financial Creditor, against Vidarbha Sugar Mills Private Limited, the Corporate Debtor, for initiation of Corporate Insolvency Resolution Process (CIRP). The Corporate Debtor had availed working capital limits from a consortium of banks, including the original lender, Nagpur Nagarik Sahakari Bank Ltd. Due to losses, the Corporate Debtor defaulted on repayments, leading to the conversion of the working capital facility into a Working Capital Term Loan (WCTL). The Corporate Debtor continued to default, resulting in the account being classified as a Non-Performing Asset (NPA). The Financial Creditor initiated proceedings

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## Facts

Vidarbha Sugar Mills Private Limited (Corporate Debtor) availed working capital limits from a consortium of banks led by Nagpur Nagarik Sahakari Bank Ltd. (original lender). The initial limit was Rs. 1.50 crore. Due to incurred losses, the Corporate Debtor defaulted in repayment, with the outstanding debt amounting to Rs. 1.84 crore as of 28.02.2013. The debt was converted into a Working Capital Term Loan (WCTL) on 29.03.2014. The Corporate Debtor further defaulted, and the account was classified as NPA on 30.06.2015. The total outstanding debt was Rs. 3,66,79,369/- as of 03.04.2015. The original lender initiated SARFAESI proceedings, including a notice under Section 13(2) on 29.06.2015 and taking possession of mortgaged properties on 10.02.2016. The Corporate Debtor

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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:** The Hon'ble Supreme Court in Innoventive Industries Ltd. Vs. ICICI Bank (2018) 1 SCC 407

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**Reasoning:** The Tribunal observed that the Corporate Debtor admitted the debt and default in various

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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 of Innoventive Industries Ltd. Vs. ICICI Bank

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## Parties

- **Judges:** K. R. SAJI…; SANJIV…
- **Respondents:** Vidarbha Sugar…

## Timeline

- **2013-02-28 — Outstandin…**: Corporate Debtor's outstanding…
- **2014-03-29 — WCTL Agre…**: Working Capital Term Loan…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(7) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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