# In the matter of Akshaya Imaging Systems Pvt. Ltd. CP-431- (IB)-CB-2018

> NCLT judgment dated 2018-05-31. Citation: TCN-2018-NCLT-01346. The case involves an application filed by Syndicate Bank, the Financial Creditor, under Section…

- **Court:** NCLT
- **Order date:** 31 May 2018
- **Citation:** TCN-2018-NCLT-01346
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/akshaya-imaging-systems-pvt-ltd-cp-431-ib-cb-2018-91c9977b

## Summary

### Background

The case involves an application filed by Syndicate Bank, the Financial Creditor, under Section 7 of the Insolvency and Bankruptcy Code, 2016, r/w Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, against Akshaya Imaging Systems Private Limited, the Corporate Debtor. The Financial Creditor sought to initiate the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, declare a moratorium, and appoint an Interim Resolution Professional (IRP). The Corporate Debtor had availed credit facilities from the Financial Creditor and defaulted on payments. Prior to this application, the Financial Creditor had initiated proceedings under the SARFAESI Act, 2002, including issuing a demand notice.

## Facts

Syndicate Bank, the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Akshaya Imaging Systems Private Limited, the Corporate Debtor. The application sought to initiate the Corporate Insolvency Resolution Process (CIRP). The Corporate Debtor had availed various credit facilities from the Financial Creditor amounting to Rs. 10,55,69,000 on various dates. In consideration of these facilities, the Corporate Debtor hypothecated movables and mortgaged immovable property. The Corporate Debtor defaulted on payments as per the agreed terms. The Financial Creditor initiated proceedings under the SARFAESI Act, 2002, issuing a demand notice on 17.10.2016. The Corporate Debtor replied on 24.11.2016, to which the Financial

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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 ascertained the existence of a default by the Corporate Debtor

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

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**Application:** In this case, the Corporate Debtor defaulted on its payment obligations to the

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## Parties

- **Judges:** Ch. Mohd Sharief…
- **Appellants:** Syndicate…
- **Respondents:** Akshaya Imaging…; Akshaya Imaging…

## Timeline

- **2015-09-01 — Execution of Memorandum of Deposit of Title…**: The Corporate Debtor executed a Memorandum of Deposit of Title Deeds, mortgaging…
- **2016-10-17 — Demand Notice under…**: The Financial Creditor issued a demand notice under Section 13(2) of the SARFAESI Act,…

## 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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