# In the matter of Aditi Oil Extraction Private Ltd. CP (IB) No. 1140-KB-2018

> NCLT judgment dated 2019-10-24. Citation: TCN-2019-NCLT-00827. International Asset Reconstruction Company Ltd. filed an application under Section 7 of the…

- **Court:** NCLT
- **Order date:** 24 Oct 2019
- **Citation:** TCN-2019-NCLT-00827
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/aditi-oil-extraction-private-ltd-cp-ib-no-1140-kb-2018-3f90dac4

## Summary

### Background

International Asset Reconstruction Company Ltd. filed an application under Section 7 of the Insolvency & Bankruptcy Code, 2016, against Aditi Oil Extraction Private Ltd, seeking to initiate Corporate Insolvency Resolution Process (CIRP). The application was based on the corporate debtor's default in paying a financial debt of Rs. 19,81,81,982/-. Allahabad Bank had previously granted and disbursed a loan of Rs. 5 crores to the corporate debtor, which was later declared NPA on 14.12.2011. The debt was assigned to the financial creditor on 11.02.2014.

## Facts

International Asset Reconstruction Company Ltd. (Financial Creditor) filed an application under Section 7 of the Insolvency & Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Aditi Oil Extraction Private Ltd. (Corporate Debtor). The basis for the application was the Corporate Debtor's default in paying a financial debt of Rs. 19,81,81,982/-. Allahabad Bank had granted a loan of Rs. 5 crores to the Corporate Debtor, which was later declared a Non-Performing Asset (NPA) on 14.12.2011. On 26.12.2011, the bank served a notice under Section 13(2) of the SARFAESI Act. The debt was assigned to the Financial Creditor on 11.02.2014. The Financial Creditor then filed a recovery proceeding in DRT, Kolkata, which is pending. The

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the …

**Ratio:** Section 7 of the Insolvency & Bankruptcy Code, 2016, allows a financial creditor to

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**Reasoning:** The NCLT considered the evidence presented by the financial creditor, including the deed

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**Interpretation:** Section 7 provides a mechanism for financial creditors to recover their dues

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**Application:** The NCLT found that the financial creditor had demonstrated the existence of a

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## Parties

- **Judges:** Madan B.…; Virendra Kumar…
- **Appellants:** International…
- **Respondents:** Aditi Oil…

## Timeline

- **2011-12-14 — Loan Account Declared…**: Allahabad Bank declared the loan account of Aditi Oil Extraction Private Ltd. as a…
- **2011-12-26 — SARFAESI…**: Allahabad Bank served a notice on Aditi Oil Extraction Private Ltd. under Section 13(2)…

## 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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