# In the matter of Ganeshom Cereals Private Limited CP (IB) No.45-Chd-Hry-2018

> NCLT judgment dated 2018-12-13. Citation: TCN-2018-NCLT-00089. Allahabad Bank, a financial creditor, filed a petition under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 13 Dec 2018
- **Citation:** TCN-2018-NCLT-00089
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/ganeshom-cereals-private-limited-cp-ib-no45-chd-hry-2018-9176edf7

## Summary

### Background

Allahabad Bank, a financial creditor, filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Insolvency Resolution Process against Ganeshom Cereals Private Limited, the corporate debtor. Allahabad Bank, constituted under the Banking Companies Act, sought to recover outstanding dues. The corporate debtor had availed various credit facilities from Allahabad Bank amounting to ₹143.76 Crores in 2014. The bank claimed the corporate debtor defaulted on payments, leading to the application before the NCLT.

## Facts

Allahabad Bank filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Ganeshom Cereals Private Limited, seeking to initiate the Corporate Insolvency Resolution Process (CIRP). Allahabad Bank, a body corporate constituted under the Banking Companies Act, claimed that Ganeshom Cereals Private Limited had defaulted on credit facilities amounting to ₹143.76 Crores availed in 2014. The bank submitted documents, including a sanction letter dated 28.06.2014, a demand promissory note dated 19.07.2014, a hypothecation agreement, and a term loan agreement. The corporate debtor had created a first charge by way of hypothecation of its current assets. The bank stated that the corporate debtor defaulted on payments, with the total debt amounting to

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## Issues and analysis

### Issue 1: Whether the application filed by Allahabad Bank under Section 7 of the Insolvency and Bankruptcy …

**Ratio:** Section 7 of the Insolvency and Bankruptcy Code, 2016, allows a financial creditor to

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**Reasoning:** The NCLT considered whether the application filed by Allahabad Bank met the requirements

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**Interpretation:** Section 7 of the IBC requires the financial creditor to furnish a record of

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**Application:** The NCLT found that Allahabad Bank had provided sufficient evidence of default,

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## Parties

- **Judges:** R.P.Nag…; Pradeep R.…
- **Appellants:** Allahabad…
- **Respondents:** Ganeshom Cereals…; M/s. Ganeshom…

## Timeline

- **2014-01-01 — Credit Facilities…**: Ganeshom Cereals Private Limited availed credit facilities amounting to ₹143.76 Crores…
- **2014-06-28 — Sanction Lette…**: Allahabad Bank issued a sanction…

## 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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