# In the matter of Avadh Fibers Private Limited C.P. (I.B) No. 593-7-NCLT-AHM-2018

> NCLT judgment dated 2020-03-04. Citation: TCN-2020-NCLT-01659. The case pertains to an insolvency petition filed by Omkara Assets Reconstruction Private…

- **Court:** NCLT
- **Order date:** 4 Mar 2020
- **Citation:** TCN-2020-NCLT-01659
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/avadh-fibers-private-limited-cp-ib-no-593-7-nclt-ahm-2018-74791a64

## Summary

### Background

The case pertains to an insolvency petition filed by Omkara Assets Reconstruction Private Limited (formerly Dena Bank, now Bank of Baroda) under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against Avadh Fibres Private Limited, the Corporate Debtor. The application was initially filed by Dena Bank, which later assigned its loans to Omkara Assets Reconstruction Private Limited. The corporate debtor defaulted on repayment of credit facilities availed from the financial creditor.

## Facts

Omkara Assets Reconstruction Private Limited (formerly Dena Bank, now Bank of Baroda) filed an insolvency petition against Avadh Fibres Private Limited under Section 7 of the Insolvency and Bankruptcy Code, 2016. Avadh Fibres Private Limited was incorporated on 21/08/2008. Dena Bank sanctioned credit facilities to Avadh Fibres, including a Cash Credit Limit of Rs.14,00,00,000/- and a Term Loan of Rs.57,00,000/- on 11/10/2012, which was later enhanced to Rs.17,50,00,000/- on 23/12/2013. The corporate debtor defaulted on payment, with the date of default being 30/06/2016. Dena Bank assigned its loans to Omkara Assets Reconstruction Private Limited on 14.12.2018. The last payment came into the account on 16/05/2016, and the petition was filed on 25/10/2018. The

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor is maintainable under Section 7 of the …

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

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**Reasoning:** The Adjudicating Authority observed that the present I.B. Petition was filed by the duly

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**Interpretation:** Section 7 provides the mechanism for a financial creditor to trigger the

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**Application:** The Adjudicating Authority found that the application was complete and filed by

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## Parties

- **Judges:** Harihar Prakash…; Prasanta Kumar…
- **Appellants:** Omkara Assets…
- **Respondents:** Avadh Fibres…

## Timeline

- **2008-08-21 — Incorporation of…**: Avadh Fibres Private…
- **2012-10-11 — Sanction of Credit…**: Dena Bank sanctioned Cash Credit Limit and…

## 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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