# In the matter of Dhar Textile Mills C.P. (I.B.) No. 191-7-NCLT-AHM-2017

> NCLT judgment dated 2019-03-05. Citation: TCN-2019-NCLT-04588. The case involves an application filed by Asset Reconstruction Company (India) Limited (ARCIL)…

- **Court:** NCLT
- **Order date:** 5 Mar 2019
- **Citation:** TCN-2019-NCLT-04588
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/dhar-textile-mills-cp-ib-no-191-7-nclt-ahm-2017-6d1c64d8

## Summary

### Background

The case involves an application filed by Asset Reconstruction Company (India) Limited (ARCIL) under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Dhar Textile Mills Limited. ARCIL, acting as a trustee of ARCIL AST 002-1 Trust and ARCIL AST - II Trust, acquired secured dues from State Bank of India, State Bank of Indore, and State Bank of Saurashtra through an assignment deed dated 22.03.2013. The corporate debtor, Dhar Textile Mills Limited, was incorporated on 15.06.1984. ARCIL claimed default on debt amounting to Rs. 337,55,92,367/- along with interest from 2003, with the account declared NPA in March 2004. The corporate debtor proposed settlement in 2013, which did not materialize. Later,

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## Facts

Asset Reconstruction Company (India) Limited (ARCIL) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Dhar Textile Mills Limited. ARCIL, acting as a trustee, acquired secured dues from State Bank of India, State Bank of Indore, and State Bank of Saurashtra through an assignment deed dated 22.03.2013. Dhar Textile Mills Limited was incorporated on 15.06.1984. ARCIL claimed default on debt amounting to Rs. 337,55,92,367/- along with interest from 2003, with the account declared NPA in March 2004. The corporate debtor proposed settlement in 2013, which did not materialize. Later, the corporate debtor issued two cheques for Rs. 1.65 crores and Rs. 1.00 crore, both dated

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## Issues and analysis

### Issue 1: Whether the application filed by ARCIL under Section 7 of the Insolvency and Bankruptcy Code, 2016, …

**Ratio:** The Supreme Court in ICICI Bank Limited Versus Official Liquidator of APS Star Industries

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**Reasoning:** The court relied on the Supreme Court's decision to conclude that the assignment of debt

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**Interpretation:** The Supreme Court's ruling clarifies that banks can transfer their assets,

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**Application:** The court applied the Supreme Court's ruling to the present case, finding that

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## Parties

- **Judges:** Harihar Prakash…; Manorama…
- **Appellants:** Asset Reconstructi…
- **Respondents:** Dhar Textile…

## Timeline

- **1984-06-15 — Incorporation of…**: Dhar Textile Mills Limited was…
- **2003-01-01 — Default o…**: Alleged default of Debt for amount of Rs. 337,55,92,367/- along with interest as on 2003…

## 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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