NCLT Orders Insolvency Proceedings Against Marg Ltd After Debt Recovery Tribunal Rules In Favor Of Its Lender ICICI Bank

The National Company Law Tribunal (NCLT) at Chennai has appointed an Interim Resolution Professional under the Insolvency and Bankruptcy Code, in a case of repayment default relating to Marg Ltd.

The development occurred after its lender ICICI Bank managed to prove the existence of debt and default against Marg Ltd by showing various documents and a Debt Recovery Certificate issued by Debt Recovery Tribunal (DRT-II) based in Chennai.

Earlier, NCLT’s Chennai Division Bench comprising B S V Prakash Kumar, Member (Judicial), and S Vijayaraghavan, Member (Technical), heard an ICICI Bank petition about Marg Ltd defaulting in repayment of Rs 71.69 crore which was payable as on April 24, 2018.

After the execution of a Credit Agreement Letter (CAL) in December 2009, the ICICI Bank had sanctioned a Rupee Term Facility of Rs 165 crore, to enable Marg finance up to 50% contribution in its business plan to set up Karaikal Port Pvt Ltd in Puducherry through equity participation as well as capital expenditure.

Later, at Marg Ltd’s request, the Rupee Term Facility was changed through a CAL in April 2010, to enable the company finance up to 50% of its contribution to set up Karaikal Port Pvt Ltd as well as a New Chennai Township Pvt Ltd.

Yet, in June 2010, a revised CAL was issued making amendments to the earlier CAL, and a term loan was utilized by Marg Ltd with repayment to be made in 21 equated quarterly installments from July 2011.

However, Marg Ltd failed to repay as agreed and the ICICI Bank initiated DRT proceedings against the company.