# 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-02274. Canbank Factors Limited, claiming to be a financial creditor, filed an I.B. Petition under…

- **Court:** NCLT
- **Order date:** 26 Jul 2019
- **Citation:** TCN-2019-NCLT-02274
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/accord-industries-limited-cp-ib-no-143-7-nclt-ahm-2017-4db1dce2

## Summary

### Background

Canbank Factors Limited, claiming to be a financial creditor, filed an I.B. Petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against Accord Industries Limited. Canbank Factors Limited claimed that Accord Industries Limited had defaulted on payments related to a sale bill factoring limit. The financial facility was initially sanctioned in 2012 and subsequently renewed and enhanced through supplemental agreements. Canbank Factors Limited alleged that Accord Industries Limited failed to make payments, and cheques issued for the outstanding amount were dishonored. This led Canbank Factors Limited to file a commercial suit against Accord Industries Limited before the City Civil Court,

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## Facts

Canbank Factors Limited (Financial Creditor) extended financial facilities to Accord Industries Limited (Corporate Debtor), including a sale bill factoring limit. The initial sanction was on 2012-10-25, with subsequent renewals and enhancements via supplemental agreements. The Corporate Debtor defaulted on payments, leading to an outstanding amount of Rs. 9,48,11,879.05 as of 2017-03-31. The Corporate Debtor issued six cheques of Rs. 1.00 Crore each, dated 2015-08-31, 2015-08-31, and 2015-11-31, which were dishonored. The Financial Creditor issued a legal notice on 2017-07-11, demanding payment of Rs. 9,34,82,001.53. The Corporate Debtor failed to make the payment. The Financial Creditor filed a commercial suit (No. 53 of 2017) before the City Civil Court, Ahmedabad,

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## Issues and analysis

### Issue 1: Whether the existence of a pre-existing commercial dispute and a pending commercial suit bar the …

**Ratio:** The I.B. Code has an overriding effect, and the existence of a pre-existing dispute does

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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 an overriding effect on other laws.

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**Application:** In this case, the Adjudicating Authority found that Accord Industries Limited

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## Parties

- **Judges:** Harihar Prakash…; Manorama…
- **Appellants:** Canbank Factors…
- **Respondents:** Accord Industries…; Accord Industries…

## Timeline

- **2012-10-25 — Initial Sa…**: Initial sanction of financial…
- **2014-01-28 — Renewal of F…**: Renewal of the financial facility via sanction letter No.…

## 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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