# Kotak Mahindra Bank Limited vs. Kew Precision Parts Private Limited

> NCLT judgment dated 2026-07-15. Citation: TCN-2026-NCLT-00668. Kotak Mahindra Bank Limited (Financial Creditor) filed a Section 7 application under the…

- **Court:** NCLT
- **Order date:** 15 Jul 2026
- **Citation:** TCN-2026-NCLT-00668
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-new-delhi/kotak-mahindra-bank-limited-vs-kew-precision-parts-private-limited-vahtx

## Summary

### Background

Kotak Mahindra Bank Limited (Financial Creditor) filed a Section 7 application under the Insolvency and Bankruptcy Code, 2016, against Kew Precision Parts Private Limited (Corporate Debtor) due to default on financial facilities. The Corporate Debtor's account was classified as a Non-Performing Asset (NPA) in September 2015. An One Time Settlement (OTS) was proposed and accepted in December 2018 for Rs. 25.55 Crores, but the Corporate Debtor failed to honor its terms. The Section 7 petition was initially admitted by the Adjudicating Authority, then set aside by the NCLAT on limitation grounds, and subsequently remanded by the Hon'ble Supreme Court for reconsideration of the applicability of Section 25(3) of the Indian Contract Act, 1872.

## Facts

Kotak Mahindra Bank Limited sanctioned financial facilities of up to Rs. 20.36 Crores to Kew Precision Parts Private Limited.

Loan documents were executed between 23.11.2012 and 05.03.2014.

Kew Precision Parts Private Limited started defaulting on payments from June 2015.

The loan account of Kew Precision Parts Private Limited was classified as NPA on 30.09.2015.

Kotak Mahindra Bank Limited issued a Loan Recall Notice for Rs. 18,19,40,434/- on 09.10.2015.

A Demand Notice under Section 13(2) of the SARFAESI Act, 2002, was issued on 19.11.2015, which was later withdrawn.

Kew Precision Parts Private Limited issued 10 cheques for Rs. 19,34,00,000/- as account payment, which were dishonoured, leading to pending Section 138 NI Act proceedings.

…

## Issues and analysis

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

**Ratio:** An One Time Settlement (OTS) agreement, when accepted and subsequently defaulted upon,

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**Reasoning:** The Corporate Debtor unequivocally acknowledged its liability and undertook to pay the

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**Interpretation:** Section 25(3) of the Indian Contract Act allows a promise to pay a time-barred

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**Application:** The NCLT applied Section 25(3) to the OTS dated 20.12.2018. Since the Corporate

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## Parties

- **Judges:** MAHENDRA KHANDELWA…; Anu Jagmoha…
- **Appellants:** Kotak Mahindra…
- **Respondents:** KEW PRECISION…
- **Other parties:** Shashi Bhushan…; Ashwani Kumar…
- **Advocates:** Gaurav…; Prakhar M…; +6 more

## Timeline

- **2012-11-23 — Loan Documents…**: Financial Creditor and Corporate Debtor executed various Loan Documents based on mutually…
- **2014-03-05 — Loan Documents…**: Financial Creditor and Corporate Debtor executed various Loan Documents based on mutually…

## 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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