# In the matter of Asis Plywood Limited Company Petition no. (IB)-434-(ND)-2017

> NCLT judgment dated 2017-11-21. Citation: TCN-2017-NCLT-00158. The case pertains to an application filed by M/s Asis Plywood Limited under Section 10 of the…

- **Court:** NCLT
- **Order date:** 21 Nov 2017
- **Citation:** TCN-2017-NCLT-00158
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/asis-plywood-limited-company-petition-no-ib-434-nd-2017-12a06ffd

## Summary

### Background

The case pertains to an application filed by M/s Asis Plywood Limited under Section 10 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of the Corporate Insolvency Resolution Process (CIRP) in respect of itself. The applicant company, incorporated in 1956, faced financial difficulties, leading to its net worth becoming negative and referral to the BIFR. The BIFR was later dissolved. The applicant had availed credit facilities from Janakalyan Sahakari Bak Ltd. (JSBL) and State Bank of India (SBI). The applicant also provided a corporate guarantee for a loan availed by M/s Shirdi Industries Limited. Defaults occurred, leading to SARFAESI actions and recovery proceedings.

## Facts

M/s Asis Plywood Limited, the applicant, filed an application under Section 10 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP). The company was incorporated under the Companies Act, 1956. The company availed credit facilities from Janakalyan Sahakari Bak Ltd. (JSBL) and State Bank of India (SBI). The company also provided a corporate guarantee for a loan availed by M/s Shirdi Industries Limited. The company defaulted on its obligations, leading to SARFAESI actions and recovery proceedings. The financial creditor, Jan Kalyan Sahakari Bank, objected to the application, claiming it was filed to defeat a recovery certificate. The applicant company's net worth became negative, and it was previously referred

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## Issues and analysis

### Issue 1: Whether the application filed by the corporate applicant under Section 10 of the Insolvency and …

**Ratio:** Section 10 of the Insolvency and Bankruptcy Code, 2016, read with Rule 7 of the

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**Reasoning:** The Adjudicating Authority examined the application and found that it disclosed the

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**Interpretation:** Section 10 of the IBC allows a corporate debtor to initiate CIRP if it meets

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**Application:** In this case, the Adjudicating Authority found that the application filed by

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## Parties

- **Judges:** Ina Mal…; S. K. MOH…
- **Respondents:** M/s Asis Plywood…

## Timeline

- **2016-01-01 — Enactment of Insolvency and Bankruptcy Code,…**: The Insolvency and…
- **2016-11-25 — Dissolution…**: The Board for Industrial and Financial Reconstruction (BIFR) was dissolved by the Central…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60 — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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