# In the matter of Amitexh Textiles Limited Company Petition (IB)No. 394-ALD-2018

> NCLT judgment dated 2019-10-03. Citation: TCN-2019-NCLT-01099. The case involves an application filed by Bank of India, a financial creditor, under Section 7…

- **Court:** NCLT
- **Order date:** 3 Oct 2019
- **Citation:** TCN-2019-NCLT-01099
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/amitexh-textiles-limited-company-petition-ibno-394-ald-2018-f4467866

## Summary

### Background

The case involves an application filed by Bank of India, a financial creditor, under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against M/s Amitech Textiles Limited, the corporate debtor. The corporate debtor had approached the financial creditor for credit facilities in 2007 and acknowledged its liabilities. The account of the corporate debtor turned into NPA on 30.09.2015. The financial creditor issued a demand notice on 14.10.2015. The corporate debtor's counsel raised the question of maintainability, alleging non-compliance with SARFAESI Act provisions. The financial creditor argued that the application is within limitation due to subsequent deposits made by the corporate debtor.

## Facts

Bank of India, a banking institution, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s Amitech Textiles Limited. M/s Amitech Textiles Limited was incorporated on 21.05.1992. The corporate debtor had approached the financial creditor for credit facilities in 2007 and authorized Mr. Anil Kumar Pandey to execute documents and acknowledgments. The corporate debtor acknowledged its liability as on 05.06.2007, with Rs. 1,45,40,467.64 due in the Cash Credit (Hypothecation) account and Rs. 50,51,088 due in the Cash Credit (Books Debts) account. The financial creditor issued a demand notice on 14.10.2015. The account of the corporate debtor turned into NPA on 30.09.2015, with

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## Issues and analysis

### Issue 1: Whether there is a duly …

**Ratio:** Section 7 of the IBC requires the financial creditor to establish the existence of a

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**Reasoning:** The court examined the documents submitted by the financial creditor, including letters

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**Interpretation:** The court interpreted Section 7 of the IBC to mean that the financial creditor

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**Application:** The court applied the ratio to the facts of the case and found that the

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## Parties

- **Judges:** Sh. Abni Ranjan…
- **Appellants:** Bank of…
- **Respondents:** M/s Amitech…

## Timeline

- **1992-05-21 — Incorporation of…**: M/s Amitech Textiles…
- **2007-06-04 — Corporate Debtor…**: Corporate debtor approached the…

## 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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