# In the matter of CLC Industries Limited C.P. No. IB-933(PB)-2019

> NCLT judgment dated 2020-01-03. Citation: TCN-2020-NCLT-02529. Edelweiss Asset Reconstruction Company Limited, the financial creditor, filed a petition under…

- **Court:** NCLT
- **Order date:** 3 Jan 2020
- **Citation:** TCN-2020-NCLT-02529
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/clc-industries-limited-cp-no-ib-933pb-2019-a44db157

## Summary

### Background

Edelweiss Asset Reconstruction Company Limited, the financial creditor, filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against CLC Industries Limited, the corporate debtor. The corporate debtor was incorporated on 25.11.1991. The financial creditor claimed default on loan facilities extended to the corporate debtor, with the total amount in default as on 15.03.2019 being Rs. 1,04,39,98,947.78/-. The corporate debtor had entered into a restructuring agreement with the financial creditor on 13.02.2017, but failed to meet the commitments, leading to the revocation of the restructuring by the financial creditor on 06.10.2017.

## Facts

Edelweiss Asset Reconstruction Company Limited (the 'Financial Creditor') filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 ('the Code') to initiate the Corporate Insolvency Resolution Process (CIRP) against CLC Industries Limited (the 'Corporate Debtor'). The Corporate Debtor was incorporated on 25.11.1991. The Financial Creditor claimed that the Corporate Debtor defaulted on loan facilities. The total amount in default as of 15.03.2019 was Rs. 1,04,39,98,947.78/-. The original lender was ICICI Bank Limited. The loan facilities included a Rupee Term Loan of Rs. 105,00,00,000/- sanctioned on February 15, 2006, a Rupee Term Loan of Rs. 50,00,00,000/- sanctioned on July 06, 2006, and a Working Capital Term Loan of Rs. 82,30,00,000/- sanctioned

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## Issues and analysis

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

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

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**Reasoning:** The court found that the Financial Creditor had provided sufficient evidence of the debt

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

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**Application:** The court applied the provisions of Section 7 of the IBC and Rule 4 (2) of the

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## Parties

- **Judges:** M. M. K…; Saroj Ra…
- **Appellants:** Edelweiss Asset…
- **Respondents:** CLC Industries…

## Timeline

- **1991-11-25 — Incorporation of…**: CLC Industries Limited…
- **2006-02-15 — Loan San…**: Rupee Term Loan of Rs.…

## 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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