# In the matter of Enfield Apparels Limited C.P. (IB) No. 338-KB-2018

> NCLT judgment dated 2018-08-06. Citation: TCN-2018-NCLT-00997. The case involves an application for the initiation of the Corporate Insolvency Resolution…

- **Court:** NCLT
- **Order date:** 6 Aug 2018
- **Citation:** TCN-2018-NCLT-00997
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/enfield-apparels-limited-cp-ib-no-338-kb-2018-0fe4082e

## Summary

### Background

The case involves an application for the initiation of the Corporate Insolvency Resolution Process (CIRP) under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Enfield Apparels Limited. Bank of India, the Financial Creditor, filed the petition due to the Corporate Debtor's default in paying debts amounting to Rs. 42,40,76,787.43, inclusive of interest. The Financial Creditor had granted and disbursed a term loan and cash credit facility to the Corporate Debtor, but the Corporate Debtor failed to repay the installments in time, leading to a breach of the loan agreement. A notice was issued under Section 13(2) of the SARFAESI Act, 2002, but the Corporate Debtor failed to clear the outstanding loan.

## Facts

Bank of India, the Financial Creditor, filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Enfield Apparels Limited, the Corporate Debtor. The Corporate Debtor defaulted on a debt of Rs. 42,40,76,787.43, inclusive of interest. The Financial Creditor had granted a term loan and cash credit facility to the Corporate Debtor on 16.09.2010, with disbursements occurring between 14.01.2011 and 12.02.2013. The Corporate Debtor failed to repay the installments, breaching the loan agreement. On 24.01.2015, the Financial Creditor issued a notice under Section 13(2) of the SARFAESI Act, 2002. The Corporate Debtor did not appear in the proceedings despite being served notice. 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 & …

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

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**Reasoning:** The court examined the documents provided by the Financial Creditor, including the loan

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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, finding that the

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## Parties

- **Judges:** Madan B.…
- **Appellants:** Bank of…
- **Respondents:** Enfield Apparels…

## Timeline

- **2010-09-16 — Loan Gra…**: Financial Creditor granted and disbursed a term loan and cash credit facility to the…
- **2011-01-14 — Loan Disbursem…**: Term loan and cash credit facility was made available to the Corporate Debtor on various…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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