NCLT orders initiation of insolvency process against Chennai-based Marg Ltd

The Chennai Bench of the National Company Law Tribunal (NCLT) has ordered the initiation of Corporate Insolvency Resolution Process (CIRP) against Chennai-based Marg Ltd on a petition filed by ICICI Bank Ltd.

According to the order copy, Marg defaulted in repaying an outstanding amount of Rs 71.69 crore due and payable on April 24, 2018. ICICI Bank had sanctioned a rupee term loan facility of Rs 165 crore on the execution of a Credit Arrangement letter (CAL) in December 2009 to enable the corporate debtor to finance up to 50 per cent contribution in the business plan of establishing Karaikal Port Private Limited (KPPL) by equity participation and capital expenditure. 

The terms and conditions of the rupee term loan facility were changed at the request of Marg through a CAL in 2010 wherein the purpose of the facility was to enable the corporate debtor to finance up to 50 per cent contribution in the business plan for establishing Karaikal Port Private Limited (KPPL) and New Chennai Township Private Limited (NCTPL) by way of equity participation and capital expenditure.

Subsequently, a term loan was disbursed and utilised by Marg. The repayment of this loan was to be made in 21 equated quarterly instalments starting July 2, 2011. 

The bank sought release of security on repayment of portion of the loan amount, and accepting the said request, Marg issued a letter dated September, 2011, incorporating the modification. 

When the company failed to repay as agreed, the bank initiated DRT proceedings and the tribunal passed an order in favour of the the bank for an amount of Rs 71.69 crore realisable from Marg, along with interest at the rate of 6 per cent from the date of decree till the date of realisation. Based on this certificate, the bank filed the case. 

Marg's promoter also had a guarantee deed of simple mortgage of immovable property of 564 acres in Kancheepuram District 

"As the Financial Creditor has proved existence of debt and default against the Corporate Debtor by showing various documents and the certificate issued by the DRT-II, Chennai, this Bench hereby holds that this Financial Creditor has proved existence of debt as well as default against the Corporate Debtor," said the order copy.

NCLT has admitted the company petition and appointed Vasudevan as the interim resolution professional.