# In the matter of Euro Pallets Pvt. Ltd. CP No. 1658-I&BC-NCLT-MB-MAH-2017

> NCLT judgment dated 2018-05-18. Citation: TCN-2018-NCLT-01378. Edelweiss Asset Reconstruction Co. Ltd., acting as the financial creditor, filed a petition…

- **Court:** NCLT
- **Order date:** 18 May 2018
- **Citation:** TCN-2018-NCLT-01378
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/euro-pallets-pvt-ltd-cp-no-1658-ibc-nclt-mb-mah-2017-97dcf1a2

## Summary

### Background

Edelweiss Asset Reconstruction Co. Ltd., acting as the financial creditor, filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Euro Pallets Private Ltd., the corporate debtor, due to a defaulted financial debt of ₹31,76,84,177. The corporate debtor had approached Central Bank of India for credit facilities in 2012, which were sanctioned. Edelweiss Asset Reconstruction Co. Ltd. is the assignee of Central Bank of India.

## Facts

In 2012, Euro Pallets Private Ltd. approached Central Bank of India for credit facilities, which were sanctioned. The facilities included Term Loans and Cash Credit. As security, Euro Pallets deposited title deeds for several plots of land and created a first charge on movable properties through hypothecation. Personal guarantees were also provided by Shri Rahul J. Singhvi and others. The corporate debtor defaulted on repayments, and the account was classified as a Non-Performing Asset (NPA) on 2012-11-27. On 2013-01-03, the Assignor recalled the credit facilities by issuing a Demand Notice. Edelweiss Asset Reconstruction Co. Ltd., as the assignee of Central Bank of India, filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, due to a defaulted

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## Issues and analysis

### Issue 1: Whether the petition 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 noted that the Financial Creditor had filed the petition under Section 7 of the

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

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**Application:** The Financial Creditor, Edelweiss Asset Reconstruction Co. Ltd., being the

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## Parties

- **Judges:** M.K. Sh…; Bhaskara Pantula…
- **Appellants:** Edelweiss Asset…
- **Respondents:** Euro Pallets Pvt.…

## Timeline

- **2012-01-01 — Credit Facilities…**: The Corporate Debtor approached the Central Bank of India for being granted and…
- **2012-05-25 — Credit Facilities…**: The Bank sanctioned and advanced credit facilities in the form of Term Loan and Cash…

## 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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