# In the matter of Accord Industries Limited C.P. (I.B) No. 143-7-NCLT-AHM-2017

> NCLT judgment dated 2019-07-26. Citation: TCN-2019-NCLT-02273. Canbank Factors Limited filed an I.B. Petition under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 26 Jul 2019
- **Citation:** TCN-2019-NCLT-02273
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/accord-industries-limited-cp-ib-no-143-7-nclt-ahm-2017-1cae3688

## Summary

### Background

Canbank Factors Limited filed an I.B. Petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Accord Industries Limited to initiate the Corporate Insolvency Resolution Process (CIRP). Canbank Factors Limited claimed to be a financial creditor, asserting that Accord Industries Limited had defaulted on payments. The financial facility included sales bill discounting and invoice discounting limits. The corporate debtor argued that there was a pre-existing commercial dispute and that a commercial suit was already pending before the City Civil Court, Ahmedabad. The corporate debtor also contended that it had made settlement proposals, but the financial creditor did not adhere to them.

## Facts

Canbank Factors Limited, a financial creditor, filed an I.B. Petition against Accord Industries Limited, a corporate debtor, under Section 7 of the Insolvency and Bankruptcy Code, 2016. Canbank Factors Limited had extended financial facilities to Accord Industries Limited, including sales bill factoring and invoice discounting limits. Accord Industries Limited allegedly defaulted on payments, leading to an outstanding amount of Rs.9,48,11,879.05 as on 31.03.2017. Accord Industries Limited issued six cheques for Rs.1.00 Crore each, but these cheques were dishonored. Canbank Factors Limited issued a legal notice to Accord Industries Limited, but the corporate debtor failed to make payment. A commercial suit was already pending before the City Civil Court, Ahmedabad, for

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## Issues and analysis

### Issue 1: Whether the existence of a pre-existing commercial dispute bars the initiation of Corporate …

**Ratio:** The existence of a pre-existing dispute does not bar the initiation of CIRP under Section

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**Reasoning:** The Adjudicating Authority relied on the Supreme Court's decision in Mobilox Vs. Kirusha

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**Interpretation:** The I.B. Code is a self-contained code with overriding effect on other laws.

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**Application:** In this case, the Corporate-Debtor had admitted its loan liability by issuing

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## Parties

- **Judges:** Harihar Prakash…; Manorama…
- **Appellants:** Canbank Factors…
- **Respondents:** Accord Industries…; Accord Industries…
- **Advocates:** Nipun si…; Vishay. J…; +4 more

## Timeline

- **2012-10-25 — Sanction…**: Sanction letter…
- **2012-12-03 — Factoring Ag…**: Sanction letter factoring cum prepayment agreement (domestic-sale bill/invoice) agreement…

## 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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