# J And K Integrated Textile Park Limited vs. Jyotsna Industries Private Limited

> NCLT judgment dated 2026-07-01. Citation: TCN-2026-NCLT-00726. J&K Integrated Textile Park Limited (Financial Creditor) filed a Section 7 petition under the…

- **Court:** NCLT
- **Order date:** 1 Jul 2026
- **Citation:** TCN-2026-NCLT-00726
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/j-and-k-integrated-textile-park-limited-vs-jyotsna-industries-private-limited-j40ez

## Summary

### Background

J&K Integrated Textile Park Limited (Financial Creditor) filed a Section 7 petition under the IBC, 2016, against Jyotsna Industries Private Limited (Corporate Debtor) for initiating CIRP due to defaults on lease rent, interest, and loan principal. The Financial Creditor had provided unsecured loans for factory construction as part of a textile park scheme. The NCLT initially rejected the petition, ruling no financial debt existed.

## Facts

J&K Integrated Textile Park Limited (Financial Creditor) is a Special Purpose Vehicle (SPV) incorporated to implement the Scheme for Integrated Textiles Park (SITP) launched by the Government of India, Ministry of Textiles, in 2005.

J&K State Industrial Development Corporation Limited (JKSIDCO) granted a lease of 200 Kanals of land at Industrial Estate, Kathua, to the Financial Creditor by Lease Deed dated 22.03.2012, for a period of 90 years.

The Financial Creditor paid a premium of Rs. 3,00,00,000/- along with advance ground rent for the leased land.

A Memorandum of Agreement was executed with the Government of India for the development of the project.

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## Issues and analysis

### Issue 1: Whether the transaction between the parties gave rise to a financial debt within the meaning of …

**Ratio:** The NCLAT held that the transaction did constitute a financial debt, thereby overturning

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**Reasoning:** The NCLAT, in its common judgment dated 19.05.2026, set aside the Adjudicating

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**Interpretation:** The NCLAT's decision implies a broader interpretation of 'financial debt' under

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**Application:** The NCLAT applied Section 7 of the IBC, determining that the conditions for

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## Parties

- **Judges:** KHETRABASI…; Sh. Shishir…
- **Appellants:** J And K Integrated…
- **Respondents:** JYOTSNA INDUSTRIES…
- **Other parties:** Rajeev S…
- **Advocates:** Vishav Bharti…; Viren S…

## Timeline

- **2005 — Scheme L…**: Scheme for Integrated Textiles Park (SITP) launched by the Government of India, Ministry…
- **2012-03-22 — Lease Deed Ex…**: J&K State Industrial Development Corporation Limited (JKSIDCO) granted a lease of 200…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(8) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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