# In the matter of Excel Computerised Embroidery Private Limited Company Petition No. IB-142-ND-2021

> NCLT judgment dated 2021-11-30. Citation: TCN-2021-NCLT-00345. M/s Intec Capital Limited filed an application under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 30 Nov 2021
- **Citation:** TCN-2021-NCLT-00345
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/excel-computerised-embroidery-private-limited-company-petition-no-ib-142-nd-2021-ad6d9ff8

## Summary

### Background

M/s Intec Capital Limited filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s Excel Computerised Embroidery Private Limited, the Corporate Debtor. The applicant, a non-banking financial company, claimed that the corporate debtor defaulted on a loan/financial facility of Rs. 82,20,000/- sanctioned to M/S Eastern Overseas, for which the corporate debtor furnished a corporate guarantee. The applicant terminated the Loan Agreement and initiated arbitration proceedings, which resulted in an arbitral award in the applicant's favor.

## Facts

M/s Intec Capital Limited (Applicant), a non-banking financial company, sought to initiate Corporate Insolvency Resolution Process (CIRP) against M/s Excel Computerised Embroidery Private Limited (Corporate Debtor) under Section 7 of the Insolvency and Bankruptcy Code, 2016. The applicant had sanctioned a loan/financial facility of Rs. 82,20,000/- to M/S Eastern Overseas, with the Corporate Debtor acting as a guarantor. A Loan cum hypothecation Agreement dated 28.11.2013 was executed. The Corporate Debtor failed to maintain adequate funds in its bank account, leading to dishonored cheques and non-payment. The applicant initiated proceedings under Section 138 of the Negotiable Instrument Act, 1881. The applicant terminated the Loan Agreement and initiated arbitration

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## Issues and analysis

### Issue 1: Whether the application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 is …

**Ratio:** Section 7(5) of the IBC, 2016 allows for the admission of an application if the

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**Reasoning:** The court found that the application was complete, the applicant was entitled to claim

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**Interpretation:** Section 7 of IBC allows a financial creditor to initiate CIRP against a

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**Application:** The court applied Section 7(5) of the IBC, 2016 to the facts, finding that the

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## Parties

- **Judges:** DEEPTI M…; SUMITA PURK…; +1 more
- **Appellants:** M/s Intec Capital…
- **Respondents:** M/S EXCEL…

## Timeline

- **2013-11-28 — Loan Agre…**: A Loan cum hypothecation Agreement dated 28.11.2013 was executed for availing above said…
- **2018-10-16 — Date of D…**: The date of default as per part…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 138 — Discharge order](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-138)

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