# In the matter of Arion Cement Manufacturing Pvt. Ltd. C.P. (IB) No. 1011-KB-2018

> NCLT judgment dated 2018-12-12. Citation: TCN-2018-NCLT-00099. The case pertains to an application filed by Reliance Commercial Finance Ltd. under Section 7…

- **Court:** NCLT
- **Order date:** 12 Dec 2018
- **Citation:** TCN-2018-NCLT-00099
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/arion-cement-manufacturing-pvt-ltd-cp-ib-no-1011-kb-2018-48890d77

## Summary

### Background

The case pertains to an application filed by Reliance Commercial Finance Ltd. under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Arion Cement Manufacturing Pvt. Ltd. The application was filed due to the corporate debtor's failure to repay a loan amount of Rs. 67,00,000/-. The financial creditor and corporate debtor entered into two loan agreements dated 31.07.2016 and 06.08.2016. The corporate debtor defaulted on the repayment, leading to the financial creditor issuing recall notices and initiating arbitration proceedings, which resulted in awards in favor of the financial creditor. Despite these awards, the corporate debtor failed to comply, prompting the financial creditor to file

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## Facts

Reliance Commercial Finance Ltd. (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Arion Cement Manufacturing Pvt. Ltd. (Corporate Debtor). The Financial Creditor extended financial assistance of Rs. 67,00,000/- to the Corporate Debtor through two Loan Cum Hypothecation Agreements dated 31.07.2016 (Rs. 65,00,000/-) and 06.08.2016 (Rs. 2,00,000/-). The loan was to be repaid in 60 monthly installments. The Corporate Debtor defaulted on the repayment, breaching the Loan Agreement. The Financial Creditor sent two recall notices dated 22.05.2017 and 25.10.2017. The matter was taken under the Arbitration and Conciliation Act, 1996, and awards dated

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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 court considered the evidence presented by the financial creditor, including the loan

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

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**Application:** The court applied Section 7 to the facts of the case, finding that the

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## Parties

- **Judges:** Jinan…
- **Appellants:** Reliance Commercia…
- **Respondents:** Arion Cement…
- **Advocates:** Arnab Basu…

## Timeline

- **2016-07-31 — Loan Agre…**: First Loan Cum Hypothecation Agreement between Reliance Commercial Finance Ltd. and Arion…
- **2016-08-06 — Loan Agre…**: Second Loan Cum Hypothecation Agreement between Reliance Commercial Finance Ltd. and…

## 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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