# 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-00096. 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-00096
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/arion-cement-manufacturing-pvt-ltd-cp-ib-no-1011-kb-2018-845585af

## 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 loan was secured by a mortgage of the corporate debtor's property. The corporate debtor defaulted on the loan repayments, leading to the issuance of recall notices and subsequent arbitration proceedings, which resulted in awards in favor of the financial creditor. Despite these awards, the corporate debtor

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## Facts

Reliance Commercial Finance Ltd. extended financial assistance of Rs. 67,00,000/- to Arion Cement Manufacturing Pvt. Ltd. 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 loan was secured by a mortgage on the corporate debtor's property located in Village- Pathra, P.O. – Nogari, P.S. - Siuri, District – Birbhum, Mouza-Pathra, Nimdaspur, J.L. No. 209, 208, Hal Khatian No. 494, PIN – 731126. Arion Cement Manufacturing Pvt. Ltd. defaulted on the loan repayments. Reliance Commercial Finance Ltd. issued recall notices on 22.05.2017 and 25.10.2017. Arbitration proceedings were initiated, and awards were passed in favor of Reliance Commercial Finance Ltd.

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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 found that the Financial Creditor had provided sufficient evidence, including

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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 (Rs. 65,00,000/-) between Reliance Commercial…
- **2016-08-06 — Loan Agre…**: Second Loan Cum Hypothecation Agreement (Rs. 2,00,000/-) between Reliance Commercial…

## 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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