# In the matter of Hindusthan National Glass & Industries Limited C.P (IB) No.369-KB-2020

> NCLT judgment dated 2021-10-21. Citation: TCN-2021-NCLT-00720. DBS Bank Limited, a financial creditor, filed an application under Section 7 of the Insolvency…

- **Court:** NCLT
- **Order date:** 21 Oct 2021
- **Citation:** TCN-2021-NCLT-00720
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/hindusthan-national-glass-industries-limited-cp-ib-no369-kb-2020-102b751e

## Summary

### Background

DBS Bank Limited, a financial creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Hindusthan National Glass & Industries Limited, the corporate debtor, seeking initiation of the corporate insolvency resolution process (CIRP). The financial creditor claimed a default of Rs. 54,542,606.31 as of December 31, 2019. The corporate debtor opposed the application, arguing that it was not maintainable, that the financial creditor had pursued alternative resolution methods, and that the corporate debtor had been making payments towards its debt. The corporate debtor also argued that the legislative intent of the Code was not to force companies into liquidation and that the application was an abuse of process.

## Facts

DBS Bank Limited (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Hindusthan National Glass & Industries Limited (Corporate Debtor). The Financial Creditor claimed that the Corporate Debtor defaulted on a debt of Rs. 54,542,606.31 as of December 31, 2019, comprising Rs.48,450,708.97 principal and Rs.6,091, 897.34 interest. The debt arose from bilateral foreign currency loans. The Corporate Debtor had an authorized share capital of Rs.511, 50, 00,000. The Financial Creditor had sanctioned the facility to the Corporate Debtor on specific terms and conditions, including a bilateral foreign currency loan of US$40 million. The Corporate Debtor offered pari passu first charge on fixed assets as security. The

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor under Section 7 of the Insolvency & …

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

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**Reasoning:** The NCLT found that the Corporate Debtor had failed to adhere to the terms of the

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**Interpretation:** Section 7 provides the legal basis for a financial creditor to trigger the

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**Application:** The NCLT applied Section 7 to the facts of the case, finding that the Corporate

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## Parties

- **Judges:** Rajasekha…; Harish Chander…
- **Appellants:** DBS Bank L…
- **Respondents:** Hindusthan…

## Timeline

- **2011-08-17 — Facility Offe…**: Financial Creditor agreed to sanction the…
- **2012-03-21 — Facility Offe…**: DBS Bank Ltd., Kolkata Branch is agreeable to sanction the requested facility to the…

## 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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