# In the matter of Gadhinglaj Agro Alcochem Limited CP 977 (IB)-MB-2019

> NCLT judgment dated 2019-08-09. Citation: TCN-2019-NCLT-02003. The case pertains to an application filed by United Bank of India, the Financial Creditor,…

- **Court:** NCLT
- **Order date:** 9 Aug 2019
- **Citation:** TCN-2019-NCLT-02003
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/gadhinglaj-agro-alcochem-limited-cp-977-ib-mb-2019-03d58abb

## Summary

### Background

The case pertains to an application filed by United Bank of India, the Financial Creditor, under Section 7 of the Insolvency & Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/S Gadhinglaj Agro Alcochem Limited, the Corporate Debtor. The petition was filed on 08.03.2019. The applicant bank had extended a Term Loan I of ₹24,80,00,000/- vide its sanction letter dated 25.09.2012. The Applicant further enhanced a Term Loan II of ₹13,00,000/- vide sanction letter dated 05.01.2016 and fund based working capital limit of ₹13,00,00,000/- in form of Cash Credit vide letter dated 05.01.2016. The enhanced loan was in continuation of existing Term Loan I of ₹24,80,00,000/-.

## Facts

United Bank of India extended a Term Loan I of ₹24,80,00,000/- to M/S Gadhinglaj Agro Alcochem Limited on 25.09.2012. Subsequently, a Term Loan II of ₹13,00,000/- and a working capital limit of ₹13,00,00,000/- were sanctioned on 05.01.2016. The total outstanding amount in default was ₹58,77,75,378/- as on 31.01.2019, with an interest rate of 12.95% at monthly rests. The date of default was 31.03.2018, when the Corporate Debtor's account was declared a Non-Performing Asset (NPA). The Applicant sent a notice on 05.04.2018 under Section 13(2) of the SARFAESI Act, 2002. The Corporate Debtor acknowledged the outstanding debt in letters dated 28.03.2018 and 15.05.2018. The financial creditor filed extracts of a Commercial Credit Information Report (CIBIL) dated 26.02.2019,

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## Issues and analysis

### Issue 1: Whether the application filed by the financial creditor under Section 7 of the I&B Code, 2016, …

**Ratio:** Section 7 of the I&B Code, 2016, allows a financial creditor to initiate CIRP against

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**Reasoning:** The Adjudicating Authority observed that the application filed by the financial creditor

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**Interpretation:** Section 7 of the I&B Code, 2016, provides the framework for a financial

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**Application:** The application filed by United Bank of India was found to be complete and in

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## Parties

- **Judges:** V. P. S…; RAJESH S…
- **Appellants:** United Bank of…
- **Respondents:** Gadhinglaj Agro…; Sarita Zo…
- **Advocates:** Arti S…; Arti Deep Singh…; +2 more

## Timeline

- **2012-09-25 — Term Loan I Sa…**: United Bank of India sanctioned Term Loan I of…
- **2016-01-05 — Term Loan II and Working Capital Limit…**: United Bank of India sanctioned Term Loan II of ₹13,00,000/- and a working capital limit…

## 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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