# In the matter of Vishnu Oil Mill Pvt. Ltd.

> NCLT judgment dated 2024-06-14. Citation: TCN-2024-NCLT-01149. Mr. Dilip Bafna HUF & Ors. ('Applicants'/'Financial Creditors') filed an application under…

- **Court:** NCLT
- **Order date:** 14 Jun 2024
- **Citation:** TCN-2024-NCLT-01149
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/vishnu-oil-mill-pvt-ltd-b02c0860

## Summary

### Background

Mr. Dilip Bafna HUF & Ors. ('Applicants'/'Financial Creditors') filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against M/s Vishnu Oil Mill Private Limited ('Respondent'/'Corporate Debtor') seeking initiation of the Corporate Insolvency Resolution Process ('CIRP') due to default in repayment of loan amount. The applicants had extended credit facilities to the corporate debtor, which was acknowledged by the corporate debtor. The corporate debtor initially paid interest, deducting TDS. However, later, the corporate debtor failed to pay the principal amount and interest. The applicants issued recall notices, and the corporate debtor indirectly admitted the non-payment. The corporate debtor argued that the default occurred during the

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## Facts

Mr. Dilip Bafna HUF, Mrs. Meena Bafna, Mr. Yash Bafna, and Mr. Moolchand Hundia (Financial Creditors) extended credit facilities to M/s Vishnu Oil Mill Private Limited (Corporate Debtor). The total principal amount advanced was Rs. 85,00,000/-. The Corporate Debtor initially paid interest and deducted TDS. The Corporate Debtor later defaulted on the principal and interest payments. The Financial Creditors issued recall notices to the Corporate Debtor. The Corporate Debtor indirectly admitted the non-payment. The Financial Creditors filed an application under Section 7 of the IBC seeking initiation of CIRP. The Corporate Debtor contended that the default occurred during the period covered by Section 10A of the IBC (COVID-19 period). The Corporate Debtor also argued that

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## Issues and analysis

### Issue 1: Whether the default occurred during the period covered by Section 10A of the Insolvency and …

**Ratio:** Section 10A of the IBC suspends the initiation of CIRP for defaults arising on or after

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**Reasoning:** The court reasoned that the Corporate Debtor had accrued the amount of interest at the

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**Interpretation:** Section 10A is interpreted to apply only to defaults that occurred during the

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**Application:** The court applied the ratio to the facts by examining the ledger entries and

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## Parties

- **Judges:** Deep Chandr…; RAJEEV ME…
- **Appellants:** DILIP BAF…
- **Respondents:** M/S VISHNU OIL…

## Timeline

- **2010-03-30 — Incorporation of…**: The Corporate Debtor is a Private Limited Company, incorporated under the Companies Act,…
- **2018-06-05 — Disbursement…**: Dilip Bafna (Applicant No. 1) disbursed Rs.…

## 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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