# In the matter of Downtown Appliances Temptations Private Limited C.P. (I.B.) No.577-KB-2018

> NCLT judgment dated 2018-09-28. Citation: TCN-2018-NCLT-00690. This case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 28 Sept 2018
- **Citation:** TCN-2018-NCLT-00690
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/downtown-appliances-temptations-private-limited-cp-ib-no577-kb-2018-3b9e9b75

## Summary

### Background

This case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, by Indiabulls Housing Finance Limited, the financial creditor, against Downtown Temptations Private Limited, the corporate debtor, for initiating the Corporate Insolvency Resolution Process (CIRP). The application was filed due to the corporate debtor's default in repaying a loan of Rs. 3,62,66,349/-. The financial creditor presented documents including a statement of account, foreclosure statement, computation of default, certificate of charge registration, loan agreement, and CIBIL report to prove the default. The corporate debtor did not appear to contest the petition.

## Facts

Indiabulls Housing Finance Limited, the financial creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Downtown Temptations Private Limited, the corporate debtor. The corporate debtor had availed a loan of Rs. 3,62,66,349/- from the financial creditor to meet working capital requirements. A cash credit limit of the same amount was sanctioned on November 30, 2014, against a security charge. The corporate debtor defaulted in repaying the principal amount along with interest, totaling Rs. 3,89,90,571/-. The financial creditor sent a notice on October 31, 2017, under Section 13(2) of the SARFAESI Act, demanding the outstanding loan amount with interest. The financial

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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, allows a financial creditor to

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**Reasoning:** The court reasoned that the application was maintainable because it was filed by a

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**Interpretation:** Section 7 provides a mechanism for financial creditors to recover their dues

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**Application:** The court applied Section 7 to the facts of the case, noting that Indiabulls

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## Parties

- **Judges:** Jinan…
- **Appellants:** Indiabulls…
- **Respondents:** Downtown Temptatio…

## Timeline

- **2014-11-30 — Cash Credit Limit…**: A cash credit limit of Rs. 3,62,66,349/- was sanctioned to Downtown Temptations Private…
- **2017-10-31 — Notice Sent by…**: Indiabulls Housing Finance Limited sent a notice under Section 13(2) of the SARFAESI Act…

## 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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