# In the matter of Ashapura Intimates Fashion Limited CP 4488 (IB)-MB-2018

> NCLT judgment dated 2019-06-28. Citation: TCN-2019-NCLT-02747. IDFC First Bank Limited filed a petition under Section 7 of the Insolvency & Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 28 Jun 2019
- **Citation:** TCN-2019-NCLT-02747
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/ashapura-intimates-fashion-limited-cp-4488-ib-mb-2018-0a23e665

## Summary

### Background

IDFC First Bank Limited filed a petition under Section 7 of the Insolvency & Bankruptcy Code, 2016, against Ashapura Intimates Fashion Limited for initiating Corporate Insolvency Resolution Process (CIRP). The petition, CP 4488/2018, claims a total default of Rs.40,13,35,178/- as of 20.11.2018. The petitioner had sanctioned a loan of Rs.40,00,00,000/- to the corporate debtor under a Master Facility Agreement dated 11.06.2018. The corporate debtor was required to create security in favor of the petitioner, including a first paripassu charge on current assets, plant, and machinery, and a registered mortgage over specific properties. The corporate debtor also issued a letter to State Bank of India to cede pari-passu charge in favor of the financial creditor.

## Facts

IDFC First Bank Limited (Financial Creditor) filed a petition against Ashapura Intimates Fashion Limited (Corporate Debtor) under Section 7 of the Insolvency & Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP). The claim is based on a default of Rs.40,13,35,178/- as of 20.11.2018. The Financial Creditor had sanctioned a loan of Rs.40,00,00,000/- to the Corporate Debtor under a Master Facility Agreement dated 11.06.2018. The Corporate Debtor was obligated to create security for the loan, including a first paripassu charge on assets and a registered mortgage on specific properties. The Corporate Debtor failed to create the required security within the stipulated 120-day period, except for personal guarantees from directors and

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## Issues and analysis

### Issue 1: Whether the petition filed under Section 7 of the I&B Code, 2016 is complete and admissible for …

**Ratio:** Section 7 of the Insolvency and Bankruptcy Code, 2016 allows a financial creditor to

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**Reasoning:** The tribunal considered the documents and submissions made by the petitioner, including

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**Interpretation:** Section 7 of the I&B Code provides the mechanism for a financial creditor

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**Application:** In this case, the tribunal found that the petition was complete and that the

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## Parties

- **Judges:** Mr V. P.…; Mr Ravikumar…
- **Appellants:** IDFC First Bank…
- **Respondents:** Ashapura Intimates…

## Timeline

- **2018-06-11 — Master Facility…**: Master Facility Agreement dated 11.06.2018 between IDFC First Bank Limited and Ashapura…
- **2018-11-20 — Default…**: Total default of…

## 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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