# In the matter of FNL AAC Block Private Limited CP (IB) No. 507-7-NCLT-AHM-2018

> NCLT judgment dated 2020-07-24. Citation: TCN-2020-NCLT-00969. The Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 24 Jul 2020
- **Citation:** TCN-2020-NCLT-00969
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/fnl-aac-block-private-limited-cp-ib-no-507-7-nclt-ahm-2018-63de72c5

## Summary

### Background

The Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s. FNL AAC Block Pvt. Ltd., the Corporate Debtor, due to a default in paying an outstanding debt of Rs. 14.85 Crores. The date of default was stated as December 31, 2017. The Financial Creditor had sanctioned and disbursed loan/credit facilities to the tune of Rs. 15.30 Crores.

## Facts

Bank of India, the Financial Creditor, sanctioned and disbursed loan/credit facilities amounting to Rs. 15.30 Crores to M/s. FNL AAC Block Pvt. Ltd., the Corporate Debtor, as per a sanction letter dated March 12, 2014. The loans included Term Loan-I (Rs. 2.00 Crores for factory construction), Term Loan-II (Rs. 4.80 Crores for indigenous and imported machinery), Term Loan-III (Rs. 4.00 Crores for imported machinery), and Cash Credit Limit (Rs. 4.50 Crores). The Corporate Debtor defaulted in paying the outstanding debt of Rs. 14.85 Crores, with the date of default stated as December 31, 2017. The Financial Creditor filed an application under Section 7 of the Insolvency & Bankruptcy Code, 2016 to initiate CIRP. The Corporate Debtor raised objections regarding defects

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## Issues and analysis

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

**Ratio:** Section 238 of the Insolvency & Bankruptcy Code, 2016 governs the present

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**Reasoning:** The court reasoned that the present proceedings are governed by the provisions of the

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**Interpretation:** Section 238 of the Insolvency & Bankruptcy Code, 2016 overrides other laws,

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**Application:** The court rejected the Corporate Debtor's plea regarding insufficient Stamp

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## Parties

- **Judges:** Madan B.…; Virendra Kumar…
- **Appellants:** Bank of…
- **Respondents:** FNL AAC Block…

## Timeline

- **2014-03-12 — Sanction Lett…**: Financial Creditor sanctioned and disbursed loan/credit facilities vide sanction letter…
- **2017-12-31 — Date of D…**: The date of default is…

## 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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