# In the matter of Arya Filaments Pvt. Ltd. CP (IB) No. 29-7-NCLT-AHM-2018

> NCLT judgment dated 2018-08-17. Citation: TCN-2018-NCLT-00933. Kotak Mahindra Bank Limited filed an application to initiate Corporate Insolvency Resolution…

- **Court:** NCLT
- **Order date:** 17 Aug 2018
- **Citation:** TCN-2018-NCLT-00933
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/arya-filaments-pvt-ltd-cp-ib-no-29-7-nclt-ahm-2018-5fd09672

## Summary

### Background

Kotak Mahindra Bank Limited filed an application to initiate Corporate Insolvency Resolution Process (CIRP) against Arya Filaments Private Limited under the Insolvency and Bankruptcy Code, 2016. The application was filed due to the corporate debtor's failure to repay debts amounting to Rs. 10,11,39,137.42 as of 30.11.2017. Kotak Mahindra Bank had granted financial facilities to Arya Filaments Private Limited from 01.06.2011 onwards, which were periodically reviewed. The corporate debtor also availed financial facilities from Union Bank of India under consortium lending. The account was classified as NPA on 29th February, 2016.

## Facts

Kotak Mahindra Bank Limited, established on 10.06.1991, filed an application to initiate Corporate Insolvency Resolution Process (CIRP) against Arya Filaments Private Limited under the Insolvency and Bankruptcy Code, 2016. Arya Filaments Private Limited is a company registered under the Companies Act, 1956. Kotak Mahindra Bank had granted total debts of Rs. 9,20,00,000.00 to Arya Filaments Private Limited on 27th March, 2015. The date of default occurred on 29th February, 2016, with an outstanding amount of Rs. 10,11,39,137.42. The corporate debtor also availed financial facilities from Union Bank of India under consortium lending. The petitioner issued a loan recall notice dated 22.04.2016 and a statutory demand notice dated 09.05.2016. The petitioner sent letters to

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## Issues and analysis

### Issue 1: Whether the application filed by Kotak Mahindra Bank Limited 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 Adjudicating Authority perused the application filed by the Financial Creditor and

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**Interpretation:** Section 7 of the IBC outlines the procedure for initiating the corporate

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**Application:** The application filed by Kotak Mahindra Bank was found to be complete in all

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## Parties

- **Judges:** Manorama…
- **Appellants:** Kotak Mahindra…
- **Respondents:** Arya Filaments…

## Timeline

- **2011-06-01 — Credit arrangement…**: Kotak Mahindra Bank Limited sanctioned financial facilities to the Corporate Debtor from…
- **2015-03-27 — Financial F…**: Corporate debtor availed revised financial facility of Rs. 920.00 lacs from 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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