# In the matter of Bawree Fashions Pvt. Ltd. C.P. (IB)-1831 (MB)-2017

> NCLT judgment dated 2018-04-25. Citation: TCN-2018-NCLT-01500. The case pertains to a Company Petition filed under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 25 Apr 2018
- **Citation:** TCN-2018-NCLT-01500
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/bawree-fashions-pvt-ltd-cp-ib-1831-mb-2017-12718caa

## Summary

### Background

The case pertains to a Company Petition filed under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, by Standard Chartered Bank, the Financial Creditor, against Bawree Fashions Private Limited, the Corporate Debtor. The petition was filed due to the corporate debtor's default in repaying ₹54,44,00,643 against various loans availed. The Corporate Debtor had filed Intervening Applications (IA 24/2018 and 26/2018) seeking dismissal of the company petition, arguing lack of jurisdiction and citing a pending civil suit. The petitioner bank sanctioned various facilities through a letter dated March 21, 2016, to provide loan of ₹56,47,00,000 through overdraft facility amounting to ₹21,50,00,000 (in which working capital demand loan-1 amounting to ₹17,20,00,000);

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## Facts

Standard Chartered Bank sanctioned loan facilities to Bawree Fashions Private Limited totaling ₹56,47,00,000, disbursed between March and August 2016. The facilities included overdraft facilities, term loans, and working capital demand loans. The Corporate Debtor executed Master credit terms on March 30, 2016, and a deed of hypothecation on March 30, 2016, and an Indenture of Mortgage dated July 1, 2016. The Corporate Debtor defaulted on repayments from May 2017 onwards, leading to the account being declared a Non-Performing Asset (NPA) on September 1, 2017. The outstanding amount was ₹54,44,00,643. The bank issued a recall letter on November 30, 2017, and a notice for invocation of personal and corporate guarantees on December 7, 2017. The Corporate Debtor filed a

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor defaulted in making repayments of the loan facilities availed from the …

**Ratio:** Section 7 of the IBC requires the Financial Creditor to prove the existence of debt and

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**Reasoning:** The court relied on the documents filed by the petitioner bank, including the account

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**Interpretation:** Section 7 of the IBC places the onus on the financial creditor to establish the

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**Application:** The court applied the ratio to the facts by examining the bank's documents and

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## Parties

- **Judges:** B.S.V. Prakash…; RavikumarDu…
- **Appellants:** Standard Chartered…
- **Respondents:** Bawree Fashions…

## Timeline

- **2016-03-21 — Sanction of Loan…**: Standard Chartered Bank sanctioned loan facilities of ₹56,47,00,000 to Bawree Fashions…
- **2016-03-30 — Execution of Master…**: The Corporate Debtor executed…

## 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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