# In the matter of Associate Decor Limited C.P(IB)No.51of 2018

> NCLT judgment dated 2018-10-26. Citation: TCN-2018-NCLT-00486. Oriental Bank of Commerce filed a petition under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 26 Oct 2018
- **Citation:** TCN-2018-NCLT-00486
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/associate-decor-limited-cpibno51of-2018-189866d4

## Summary

### Background

Oriental Bank of Commerce filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Associate Décor Limited. The petition was based on the corporate debtor's failure to commit a default of Rs. 128,60,01,812.05. Associate Décor Limited had availed various credit facilities from the Financial Creditor under a consortium arrangement. The account was classified as a non-performing asset on 31.01.2016. The Financial Creditor issued a demand notice under Section 13(2) of the SARFAESI Act on 15.06.2017, followed by a legal notice dated 24.06.2017. The Corporate Debtor also filed W.P. No. 25907 of 2018 before the High Court of Karnataka, seeking a mandamus to direct the Respondents

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## Facts

Oriental Bank of Commerce (OBC) filed a petition to initiate Corporate Insolvency Resolution Process (CIRP) against Associate Décor Limited due to a default of Rs. 128,60,01,812.05. OBC, a banking company, is the financial creditor. Associate Décor Limited, initially Star Panel Boards Limited, availed credit facilities from a consortium of banks, including OBC, Corporation Bank, and Bank of Baroda. The company's account was classified as a non-performing asset (NPA) on 31.01.2016. OBC issued a demand notice under Section 13(2) of SARFAESI Act on 15.06.2017, followed by a legal notice on 24.06.2017. The consortium leader, Corporation Bank, invoked pledged shares of the promoters and initiated a sale process. Associate Décor Limited filed a writ petition before the High

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## Issues and analysis

### Issue 1: Whether the petition filed by Oriental Bank of Commerce under Section 7 of the Insolvency and …

**Ratio:** Section 7 of the Insolvency and Bankruptcy Code, 2016, provides the process for

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**Reasoning:** The Adjudicating Authority found that the Financial Creditor, Oriental Bank of Commerce,

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**Interpretation:** Section 7 of the IBC allows a financial creditor to initiate CIRP when a

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**Application:** In this case, the Adjudicating Authority found that Oriental Bank of Commerce

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## Parties

- **Judges:** Rajeswara Rao…; Ashok Kumar…
- **Appellants:** Oriental Bank of…
- **Respondents:** Associate Décor…

## Timeline

- **2016-01-31 — Account Classified as…**: The account of Associate Décor Limited was…
- **2017-05-15 — NCLAT Or…**: Reference to the Order dated 15th May 2017 of Hon'ble NCLAT in Company Appeal (AT)…

## 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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