# In the matter of Enfields Gems & Jewellery Ltd. C.P. (IB) No. 1331-KB-2018

> NCLT judgment dated 2019-04-23. Citation: TCN-2019-NCLT-03746. Union Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 23 Apr 2019
- **Citation:** TCN-2019-NCLT-03746
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/enfields-gems-jewellery-ltd-cp-ib-no-1331-kb-2018-00ee6a17

## Summary

### Background

Union Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against M/s Enfields Gems & Jewellery Ltd. for initiating Corporate Insolvency Resolution Process (CIRP). The application was based on the corporate debtor's default in repaying loans availed from the financial creditor. The financial creditor had granted various credit facilities to the corporate debtor, which were renewed and sanctioned from time to time. The corporate debtor failed to make payments, leading the financial creditor to classify the account as a non-performing asset (NPA). The financial creditor issued a recall notice and subsequently filed an Original Application before the Debts Recovery Tribunal for recovering the outstanding dues.

## Facts

Union Bank of India granted credit facilities to M/s Enfields Gems & Jewellery Ltd. totaling Rs. 53,21,31,671/- as of 17.09.2018, under sanction letters dated 29.09.2008, 18.06.2011, and 06.09.2011. The corporate debtor defaulted on repayments, leading the bank to classify the account as a Non-Performing Asset (NPA) on 10.01.2013. The bank issued a recall notice on 22.04.2013 and a demand notice on 27.05.2013 under the SARFAESI Act, 2002. The corporate debtor made a payment of Rs. 60,00,000/- pursuant to the recall notice but failed to pay the balance amount. The bank filed an Original Application (O.A. No. 339 of 2014) before the Debts Recovery Tribunal (DRT)-I, Kolkata, to recover the outstanding dues, which is pending adjudication. The corporate debtor executed

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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 considered the documents submitted by the financial creditor, including

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

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**Application:** The court found that the financial creditor had demonstrated the existence of a

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## Parties

- **Judges:** Jinan…
- **Appellants:** Union Bank of…
- **Respondents:** M/s Enfields Gems…

## Timeline

- **2008-09-29 — Sanction…**: Financial Creditor granted credit facilities amounting to Rs. 25,00,00,000/- to the…
- **2011-06-18 — Sanction…**: Financial Creditor granted credit facilities amounting to Rs. 35,00,00,000/- to the…

## 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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