# In the matter of Heena Nandlal Thakkar vs. Karnataka Bank Ltd. & Anr. Company Appeal (AT) (Ins) No. 553 of 2023

> NCLAT judgment dated 2023-05-02. Citation: TCN-2023-NCLAT-00558. The appeal was filed under Section 61 of the Insolvency and Bankruptcy Code, 2016, against an…

- **Court:** NCLAT
- **Order date:** 2 May 2023
- **Citation:** TCN-2023-NCLAT-00558
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/heena-nandlal-thakkar-vs-karnataka-bank-ltd-anr-company-appeal-09c5c74e

## Summary

### Background

The appeal was filed under Section 61 of the Insolvency and Bankruptcy Code, 2016, against an order dated 24.03.2023 passed by the National Company Law Tribunal (NCLT), Mumbai Bench, Court-II, which admitted an application filed under Section 7 of the Code by Karnataka Bank Ltd, the Financial Creditor. The application was related to a default in payment of a financial debt amounting to Rs. 15,81,63,867/-. The NCLT initiated Corporate Insolvency Resolution Process (CIRP).

## Facts

Karnataka Bank Ltd., the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code (IBC) before the NCLT due to a default in payment of a financial debt of Rs. 15,81,63,867/-. The corporate debtor's account was declared a Non-Performing Asset (NPA) on 01.05.2019. The total amount disbursed to the corporate debtor was Rs. 17,45,00,000/-. The appellant, the Suspended Director of the corporate debtor, claimed that Rs. 4,42,00,000/- had already been paid in a proceeding before the DRT. The loan was sanctioned to the appellant since August 2015 and the facility continued up to 31.03.2018. The appellant did not participate in the NCLT proceedings despite valid service of notice. The total debt as of the date of filing the application

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## Issues and analysis

### Issue 1: Whether the NCLT was justified in admitting the application under Section 7 of the IBC and …

**Ratio:** The NCLT is empowered to admit an application under Section 7 of the IBC if there is a

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**Reasoning:** The NCLAT noted that the NCLT had admitted the application after finding that there was

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**Interpretation:** Section 7 of the IBC allows a financial creditor to initiate CIRP against a

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**Application:** In this case, the NCLT found that there was a default in payment of a financial

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## Parties

- **Judges:** Rakesh…; Alok Sriv…
- **Appellants:** Heena Nandlal…
- **Respondents:** Karnataka Bank…

## Timeline

- **2015-08-01 — Loan Sanc…**: Loan was sanctioned to the appellant…
- **2018-03-31 — Facility Co…**: Loan facility continued…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 61 — Appeals and Appellate Authority](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-61)

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