# In the matter of Cane Agro Energy (India) Limited CP No. 233-IBC-MB-2021

> NCLT judgment dated 2021-04-30. Citation: TCN-2021-NCLT-02242. ASREC (India) Limited filed an application under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 30 Apr 2021
- **Citation:** TCN-2021-NCLT-02242
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/cane-agro-energy-india-limited-cp-no-233-ibc-mb-2021-6d07bbfd

## Summary

### Background

ASREC (India) Limited filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Cane Agro Energy (India) Limited, claiming a default of Rs. 38,87,53,376/-. The Corporate Debtor had availed loan facilities from Dombivli Nagari Sahakari Bank Limited (DNSB), which were later assigned to ASREC. The Corporate Debtor defaulted on payments, leading to the declaration of the loan accounts as NPA. The Corporate Debtor admitted to the debt but requested time to clear the dues, citing financial constraints and the impact of COVID-19 on the sugar industry. The NCLT admitted the petition, finding that all ingredients of Section 7 of the IBC were satisfied.

## Facts

ASREC (India) Limited, a Securitization and Asset Reconstruction Company, filed a petition against Cane Agro Energy (India) Limited under Section 7 of the Insolvency and Bankruptcy Code, 2016. The total amount claimed to be in default is Rs. 38,87,53,376/-, including interest of Rs. 8,15,08,241/-. The default dates for the Term Loan Facility and Cash Credit Facility are 30.10.2018 and 30.09.2018, respectively. Cane Agro Energy (India) Limited had initially obtained loan facilities from Dombivli Nagari Sahakari Bank Limited (DNSB), amounting to Rs. 13,22,29,000/- in 2014. DNSB and the Corporate Debtor executed various loan documents, including a Deed of Mortgage dated 23.07.2014. DNSB later assigned the term loan and cash credit facilities to ASREC via Assignment

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 is maintainable …

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

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**Reasoning:** The Corporate Debtor admitted to the debt and the default in its reply. The NCLT

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**Interpretation:** Section 7 of the IBC is interpreted to mean that if a financial debt exists and

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**Application:** In this case, the Corporate Debtor's admission of the debt and default, coupled

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## Parties

- **Judges:** SUCHITRA KANUPARTH…; Chandra Bha…; +1 more
- **Appellants:** Asrec (India)…
- **Respondents:** Cane Agro Energy…

## Timeline

- **2014-07-23 — Deed of Mo…**: Deed of Mortgage executed between DNSB and Corporate Debtor for term loan amounting to…
- **2018-09-30 — Default…**: Date of default for the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 3 — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-3)

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