# In the matter of Bhagya Diamond Jewellary Pvt. Ltd. CP (IB) No. 22-7-NCLT-AHM-2018

> NCLT judgment dated 2019-04-25. Citation: TCN-2019-NCLT-03698. Dena Bank, as the Financial Creditor, filed an application under Section 7 of the Insolvency…

- **Court:** NCLT
- **Order date:** 25 Apr 2019
- **Citation:** TCN-2019-NCLT-03698
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/bhagya-diamond-jewellary-pvt-ltd-cp-ib-no-22-7-nclt-ahm-2018-6fdcb3a2

## Summary

### Background

Dena Bank, as the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against Bhagya Diamond Jewellery Pvt. Ltd., the Corporate Debtor, due to unpaid credit facilities. The applicant had sanctioned/granted credit facilities to the Corporate Debtor during the year 2014-2015. The Corporate Debtor failed to repay the debt as per the agreed terms and conditions.

## Facts

Dena Bank, the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Bhagya Diamond Jewellery Pvt. Ltd., the Corporate Debtor. The Corporate Debtor's authorized capital is Rs.67.00 Lakhs, and the issued, subscribed, and paid-up capital is Rs.27.00 lakhs. The Financial Creditor had sanctioned/granted credit facilities to the Corporate Debtor during the year 2014-2015. The Corporate Debtor failed to repay the debt as per the agreed terms and conditions. The total amount of debt granted was Rs.9,00,00,000/- as a working capital limit sanctioned on 29.09.2014, plus a TOD of Rs.90,00,000/- sanctioned on 27.05.2015. The amount claimed to be in default was

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## Issues and analysis

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

**Ratio:** Section 7 of the Insolvency and Bankruptcy Code, 2016, read with Rule 4 of the Insolvency

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**Reasoning:** The Adjudicating Authority perused the application and found it to be complete and in

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**Interpretation:** Section 7 of the I&B Code allows a financial creditor to initiate CIRP

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**Application:** The application filed by Dena Bank was found to be complete and in compliance

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## Parties

- **Judges:** Harihar Prakash…; Manorama…
- **Appellants:** Dena…
- **Respondents:** Bhagya Diamond…

## Timeline

- **2014-09-29 — Sanction of Working…**: Working Capital Limit of…
- **2015-05-27 — Sanction…**: TOD of Rs.90,00,000/-…

## 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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