# In the matter of Ajaz Nanda Designs Private Limited Company Petition No. (IB)-1739(PB)-2018

> NCLT judgment dated 2019-05-21. Citation: TCN-2019-NCLT-03240. Jammu & Kashmir Bank Limited filed an application under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 21 May 2019
- **Citation:** TCN-2019-NCLT-03240
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/ajaz-nanda-designs-private-limited-company-petition-no-ib-1739pb-2018-8ab0d74f

## Summary

### Background

Jammu & Kashmir Bank Limited filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s Ajaz Nanda Designs Private Limited. The application was based on the corporate debtor's failure to repay outstanding dues. The applicant claimed a default of Rs. 1,97,33,643.49/- as of 01.11.2018, along with further interest. The corporate debtor was proceeded against ex-parte due to lack of representation despite substituted service.

## Facts

Jammu & Kashmir Bank Limited, a financial creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s Ajaz Nanda Designs Private Limited, the corporate debtor. The corporate debtor availed various credit facilities from the applicant bank in 2011, including packing credit limit, cash credit, post shipment credit, and a term loan, sanctioned vide letter dated 28.03.2011. Loan agreements and other security documents, including demand promissory notes, deeds of hypothecation, and personal guarantees, were executed. The facilities were modified/renewed from time to time, with the last renewal in 2015. As of 01.11.2018, a sum of Rs. 1,97,33,643.49/- was claimed to be

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## Issues and analysis

### Issue 1: Whether the application filed by Jammu & Kashmir Bank under Section 7 of the Insolvency and …

**Ratio:** Section 7(5)(a) of the Insolvency and Bankruptcy Code, 2016, states that the Adjudicating

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**Reasoning:** The NCLT found that the applicant bank had placed on record sufficient evidence,

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**Interpretation:** Section 7 of the IBC provides a mechanism for financial creditors to initiate

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**Application:** The NCLT applied the provisions of Section 7 of the IBC to the facts of the

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## Parties

- **Judges:** M. M. K…; S. K. MOH…
- **Appellants:** Jammu And Kashmir…
- **Respondents:** M/s Ajaz Nanda…

## Timeline

- **2011-01-24 — Incorporation of…**: M/s Ajaz Nanda Designs…
- **2011-03-28 — Sanction…**: Sanction letter issued…

## 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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