# 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-03741. 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-03741
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/enfields-gems-jewellery-ltd-cp-ib-no-1331-kb-2018-a2ab7408

## Summary

### Background

Union Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s Enfields Gems & Jewellery Ltd. The application was filed due to the Corporate Debtor's default in repaying loans availed from the Financial Creditor. The total outstanding amount, including interest, was Rs. 53,21,31,671 as of 17.09.2018. The Financial Creditor had granted various credit facilities to the Corporate Debtor since 2008, which were renewed and sanctioned from time to time. The Corporate Debtor's account was classified as a non-performing asset (NPA) on 10.01.2013, and a recall notice was issued on 22.04.2013. Despite several attempts by the Financial Creditor, including filing an

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## Facts

Union Bank of India granted various credit facilities to M/s Enfields Gems & Jewellery Ltd. The Corporate Debtor defaulted in repaying the loan, leading to an outstanding amount of Rs. 53,21,31,671 as of 17.09.2018. The loans were sanctioned under letters dated 29.09.2008, 18.06.2011, and 06.09.2011. The Corporate Debtor executed loan and banking documents and deposited the Title Deed for mortgage creation. The charge was registered with the Registrar of Companies, West Bengal. The Corporate Debtor's account was classified as NPA on 10.01.2013. A recall notice was issued on 22.04.2013, and a demand notice under Section 13(2) of the SARFAESI Act, 2002, was sent on 27.05.2013. The Corporate Debtor made a payment of Rs. 60,00,000 pursuant to the recall notice but

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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 submissions of the Financial Creditor and the documents

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

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**Application:** The Financial Creditor, Union Bank of India, filed the application under

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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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