# In the matter of Ashoka Multiyarn Mills Ltd. (IB)-400(ND)-2017

> NCLT judgment dated 2017-11-15. Citation: TCN-2017-NCLT-00200. Union Bank of India filed a petition as a Financial Creditor under Section 7 of the Insolvency…

- **Court:** NCLT
- **Order date:** 15 Nov 2017
- **Citation:** TCN-2017-NCLT-00200
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/ashoka-multiyarn-mills-ltd-ib-400nd-2017-51dfd71b

## Summary

### Background

Union Bank of India filed a petition as a Financial Creditor under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process against Ashoka Maltiyarn Mills Ltd. The bank claimed that the corporate debtor was unable to pay its debt.

## Facts

Union Bank of India, a scheduled bank, filed a petition against Ashoka Maltiyarn Mills Ltd. under Section 7 of the IBC, 2016, claiming the corporate debtor defaulted on its debt. Ashoka Maltiyarn Mills Ltd. had availed various credit facilities from the bank and provided security, including personal guarantees and hypothecation deeds. The corporate debtor failed to adhere to the terms of availment and defaulted on payments, leading to the account being declared a Non-Performing Asset (NPA) on 2015-06-30. A notice under Section 13(2) of the SARFAESI Act was issued. The outstanding liability as of 2017-08-31 was Rs. 25,93,84,046.73. The bank also filed a suit for recovery before DRT-1, Kolkata, for Rs. 21,80,44,846. The corporate debtor failed to put up a defense despite

…

## Issues and analysis

### Issue 1: Whether the Corporate Debtor is in default of liquidating its debt, thus entitling the Financial …

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

…

**Reasoning:** The NCLT was satisfied that the Corporate Debtor was in default of liquidating its debt,

…

**Interpretation:** Section 7 of the IBC provides a mechanism for financial creditors to recover

…

**Application:** The NCLT applied Section 7 of the IBC to the facts of the case, where the

…

## Parties

- **Judges:** Ina Mal…; SH. S.K MOH…
- **Appellants:** Union Bank of…
- **Respondents:** Ashoka Maltiyarn…

## Timeline

- **2015-06-30 — Account Decla…**: The account of Ashoka Maltiyarn Mills Ltd.…
- **2017-08-31 — Outstanding L…**: The total outstanding liability of Ashoka…

## 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)

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclt-chandigarh/ashoka-multiyarn-mills-ltd-ib-400nd-2017-51dfd71b