# In the matter of Yummz Foods Private Limited C.P. (IB)-850-KB-2019

> NCLT judgment dated 2022-11-17. Citation: TCN-2022-NCLT-00412. Indian Overseas Bank filed a petition under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 17 Nov 2022
- **Citation:** TCN-2022-NCLT-00412
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/yummz-foods-private-limited-cp-ib-850-kb-2019-a54629b0

## Summary

### Background

Indian Overseas Bank filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Yummz Foods Private Limited, alleging default on a loan. The bank claimed that Yummz Foods had defaulted on a total amount of ₹17,92,50,751 as of April 30, 2019, including unapplied interest. The account was classified as a Non-Performing Asset (NPA) on March 31, 2017. The corporate debtor contested the claim, arguing that the claims were inflated, ambiguous, and vague, and that the bank had failed to disclose the rate of interest applied to the loan accounts. The corporate debtor also argued that the bank had failed to provide copies of the loan documents and had acted against the norms of Fair

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## Facts

Indian Overseas Bank (IOB) sanctioned credit facilities to Yummz Foods Private Limited totaling ₹3,40,00,000. The first credit facility was granted on February 4, 2013, and subsequently renewed and enhanced multiple times until February 6, 2016. As per the terms of the sanction letter, Yummz Foods executed loan and banking documents in favor of IOB and deposited original title deeds for mortgage creation to secure the loan repayment. A charge was created and registered with the Registrar of Companies, West Bengal. Yummz Foods admitted its dues to IOB in a revival letter dated August 10, 2015. Yummz Foods approached IOB with One-Time Settlement (OTS) proposals, which were later rejected by IOB. IOB initiated SARFAESI action by issuing a notice under section 13(2) of the

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor defaulted on …

**Ratio:** The Hon'ble Supreme Court, in the matter of Swiss Ribbons Pvt. Ltd. and Ors. vs. Union of

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**Reasoning:** The Adjudicating Authority relied on the CIBIL Report, the certificate under the Banker's

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**Interpretation:** The existence of a debt and default are prerequisites for initiating CIRP under

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**Application:** In this case, the CIBIL Report, the certificate under the Banker's Book

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## Parties

- **Judges:** RohitKa…; Balraj…
- **Appellants:** Indian Overseas…
- **Respondents:** Yummz Foods…

## Timeline

- **2013-02-04 — First Credit Facility…**: Indian Overseas Bank granted the first credit…
- **2016-02-06 — Credit Facilities…**: The credit facilities were renewed and enhanced multiple times between 04.02.2013 and…

## 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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