# In the matter of Afcan Impex Pvt. Limited CP (IB) No. 289-7-NCLT-AHM-2020

> NCLT judgment dated 2021-02-17. Citation: TCN-2021-NCLT-03023. The case pertains to an application filed by Bank of Maharashtra under Section 7 of the…

- **Court:** NCLT
- **Order date:** 17 Feb 2021
- **Citation:** TCN-2021-NCLT-03023
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/afcan-impex-pvt-limited-cp-ib-no-289-7-nclt-ahm-2020-f6dff178

## Summary

### Background

The case pertains to an application filed by Bank of Maharashtra under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Afcan Impex Pvt. Ltd. The financial creditor, Bank of Maharashtra, claimed a default of Rs. 8,44,15,488.00/- including interest, with the date of default stated as 04.03.2020. The Corporate Debtor failed to make payments on outstanding dues despite various loan facilities provided by the Financial Creditor. The application was filed on 28.07.2020, and notice was issued to the Corporate Debtor on 24.08.2020. The Corporate Debtor did not file Vakalatnama or affidavit in reply, leading the Adjudicating Authority to proceed ex-parte against them.

## Facts

Bank of Maharashtra, the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Afcan Impex Pvt. Ltd., the Corporate Debtor. The claimed default amount was Rs. 8,44,15,488.00/- including interest, with the default date being 04.03.2020. The Corporate Debtor had received various loan facilities but failed to make payments on outstanding dues. The application was filed on 28.07.2020, and notice was issued on 24.08.2020. The Corporate Debtor did not respond to the notice. The Financial Creditor argued that the debt was above the threshold, the application was within limitation, and the Corporate Debtor had acknowledged the debt. The Financial Creditor proposed

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor under Section 7 of the Insolvency and …

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

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**Reasoning:** The Adjudicating Authority considered the submissions and material on record, including

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

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**Application:** The Adjudicating Authority applied Section 7 to the facts of the case, noting

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## Parties

- **Judges:** Madan B.…; Virendra Kumar…
- **Appellants:** Bank of Maharashtr…
- **Respondents:** Afcan Impex Pvt.…; Afcan Impex Pvt…
- **Advocates:** Pranav G.…

## Timeline

- **2020-03-04 — Date of D…**: The date on which the Corporate Debtor defaulted on its payment obligations to the…
- **2020-07-28 — Application…**: The Financial Creditor filed an application under Section 7 of the IBC, 2016, to initiate…

## 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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