# In the matter of Forgings Private Limited (IB)-455(PB)-2017

> NCLT judgment dated 2018-03-28. Citation: TCN-2018-NCLT-01625. Indiabulls Housing Finance Limited, the Financial Creditor, filed an application under Section…

- **Court:** NCLT
- **Order date:** 28 Mar 2018
- **Citation:** TCN-2018-NCLT-01625
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/forgings-private-limited-ib-455pb-2017-acf03768

## Summary

### Background

Indiabulls Housing Finance Limited, the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s. Forgings Private Limited, the Corporate Debtor, due to defaults in loan repayment. The Corporate Debtor had approached the Financial Creditor for a loan of Rs. 25,80,99,593/- to meet working capital requirements. The loan was sanctioned on 30.03.2015, and the entire amount was disbursed on 31.03.2015. The loan agreement stipulated repayment in monthly installments, with the principal repayable in two installments. The Corporate Debtor defaulted on these payments, leading to the Financial Creditor declaring the account as a Non-Performing Asset (NPA) on

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## Facts

M/s. Indiabulls Housing Finance Limited (Financial Creditor) provided a loan of Rs. 25,80,99,593/- to M/s. Forgings Private Limited (Corporate Debtor) on 31.03.2015, sanctioned on 30.03.2015. The loan was intended for the Corporate Debtor's working capital requirements. The loan agreement stipulated repayment in monthly installments, with the principal repayable in two installments. The Corporate Debtor defaulted on payments, leading to dishonor of cheques on multiple dates in April, May, June, July and August 2016. The total amount in default was Rs. 34,25,31,305.11/-. The Financial Creditor declared the Corporate Debtor's account as NPA on 21.08.2016 and issued a notice under Section 13(2) of the SARFAESI Act on 22.08.2016. The Corporate Debtor filed a Securitization

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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 NCLT considered the evidence presented by the Financial Creditor, including the loan

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

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**Application:** The NCLT found that the Financial Creditor had demonstrated a clear default by

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## Parties

- **Judges:** M. M. K…; S. K. MOH…
- **Appellants:** Indiabulls…
- **Respondents:** Forgings Private…

## Timeline

- **2015-03-30 — Loan Sanc…**: Financial Creditor sanctioned the loan…
- **2015-03-31 — Loan Disb…**: Financial Creditor disbursed the entire…

## 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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