# In the matter of Adya Oils and Chemicals Limited CP (IB) 2392-MB-2019

> NCLT judgment dated 2019-09-16. Citation: TCN-2019-NCLT-01447. Stressed Assets Stabilisation Fund, as assignee of IDBI Bank, filed a petition under Section 7…

- **Court:** NCLT
- **Order date:** 16 Sept 2019
- **Citation:** TCN-2019-NCLT-01447
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/adya-oils-and-chemicals-limited-cp-ib-2392-mb-2019-343613eb

## Summary

### Background

Stressed Assets Stabilisation Fund, as assignee of IDBI Bank, filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Adya Oils and Chemicals Limited (Corporate Debtor) for defaulting on a term loan. IDBI Bank had granted a term loan of ₹7,00,00,000/- to the Corporate Debtor on 22.12.1998. The Corporate Debtor failed to repay the installments of principal and interest. IDBI Bank called upon the Corporate Debtor to repay its outstanding dues vide letter dated 06.11.2003. Subsequently, the Central Government set up Stressed Asset Stabilisation Fund (SASF) to acquire stressed assets of IDBI Bank. IDBI Bank transferred the loan to SASF on 30.09.2004.

## Facts

IDBI Bank granted a term loan of ₹7,00,00,000/- to Adya Oils and Chemicals Limited (Corporate Debtor) on 22.12.1998. The Corporate Debtor defaulted on repayments. IDBI Bank issued a recall notice on 06.11.2003. The Central Government established Stressed Assets Stabilisation Fund (SASF) via a Trust Deed dated 04.09.2004. IDBI Bank assigned the loan to SASF on 30.09.2004. The outstanding amount as of 01.05.2019 was ₹135,38,74,846/-. The Corporate Debtor did not file a reply to the petition. The petitioner provided documents including the loan agreement, deed of hypothecation, guarantee agreement, pledge of shares agreement, financial statements, and statement of accounts. The Corporate Debtor was served with the petition.

## Issues and analysis

### Issue 1: Whether the Corporate Debtor committed a default in …

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

…

**Reasoning:** The Adjudicating Authority considered the loan agreement, statement of accounts, and

…

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

…

**Application:** The Corporate Debtor's failure to repay the loan, as evidenced by the documents

…

## Parties

- **Judges:** SUCHITRA KANUPARTH…; V. Nallasen…; +1 more
- **Appellants:** Stressed Assets…
- **Respondents:** Adya Oils and…

## Timeline

- **1998-12-22 — Loan Agre…**: IDBI Bank granted a term loan of…
- **2003-11-06 — Recall N…**: IDBI Bank issued a recall notice to the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 2(h) — Application](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-2)

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclt-chandigarh/adya-oils-and-chemicals-limited-cp-ib-2392-mb-2019-343613eb