# In the matter of Aireff De Tox Private Limited C.P. (IB) No. 4760-NCLT-MB-2018

> NCLT judgment dated 2019-10-10. Citation: TCN-2019-NCLT-01038. The case involves an application filed by TJSB Sahakari Bank Limited, the Financial Creditor,…

- **Court:** NCLT
- **Order date:** 10 Oct 2019
- **Citation:** TCN-2019-NCLT-01038
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/aireff-de-tox-private-limited-cp-ib-no-4760-nclt-mb-2018-e28e7e05

## Summary

### Background

The case involves an application filed by TJSB Sahakari Bank Limited, the Financial Creditor, under Section 7 of the Insolvency and Bankruptcy Code, 2016 (I&B Code), against Aireff De Tox Private Limited, the Corporate Debtor, for initiating Corporate Insolvency Resolution Process (CIRP). The application claims a total default of ₹14,38,62,488/- including interest as on 30.09.2018. The Financial Creditor sanctioned a credit facility to the Corporate Debtor, which the Corporate Debtor defaulted on after the expiry of the validity period. The Corporate Debtor failed to appear before the Bench.

## Facts

TJSB Sahakari Bank Limited, the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Aireff De Tox Private Limited, the Corporate Debtor, to initiate Corporate Insolvency Resolution Process (CIRP). The Financial Creditor claimed a total default of ₹14,38,62,488/- including interest as on 30.09.2018. The Financial Creditor had sanctioned a loan to the Corporate Debtor vide Sanction Letter No. 44/12 dated 01.12.2014, and the parties entered into a Facility Agreement dated 06.08.2014 and a Supplemental Facility Agreement dated 09.01.2015. The credit facility was renewed vide Sanction Letter No. 45/15 dated 27.11.2015. The Corporate Debtor defaulted in repayment of the credit facility after the expiry of the validity

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## Issues and analysis

### Issue 1: Whether the application filed under Section 7 of the I&B Code, 2016, for initiating corporate …

**Ratio:** Section 7 of the I&B Code allows a financial creditor to initiate CIRP against a

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**Reasoning:** The court found that the application was complete, the financial debt exceeded Rupees One

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**Interpretation:** Section 7 of the I&B Code provides the mechanism for a financial creditor

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**Application:** The court applied Section 7 to the facts, noting the existence of a financial

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## Parties

- **Judges:** Mr V. P.…; Mr Rajesh…
- **Appellants:** TJSB Sahakari…
- **Respondents:** Aireff De Tox…
- **Advocates:** Partha S…

## Timeline

- **2014-06-08 — Facility Ag…**: Applicant and Corporate Debtor…
- **2014-12-01 — Sanction…**: Sanction Letter No. 44/12…

## 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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