# In the matter of Joshi Deodhar Engineering Company Limited C.P. (IB) No.4735-NCLT-MB-2018

> NCLT judgment dated 2019-10-15. Citation: TCN-2019-NCLT-00982. The case involves an application filed by TJSB Sahakari Bank Limited, the Financial Creditor,…

- **Court:** NCLT
- **Order date:** 15 Oct 2019
- **Citation:** TCN-2019-NCLT-00982
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/joshi-deodhar-engineering-company-limited-cp-ib-no4735-nclt-mb-2018-a8d7ffa9

## Summary

### Background

The case involves an application filed by TJSB Sahakari Bank Limited, the Financial Creditor, against Joshi Deodhar Engineering Company Limited, the Corporate Debtor, under Section 7 of the Insolvency and Bankruptcy Code, 2016, for initiating Corporate Insolvency Resolution Process (CIRP). The application was filed due to a default of ₹1,39,41,586.37/- along with interest as on 30.09.2018. The Corporate Debtor had availed credit facilities from the Applicant, which were classified as Non-Performing Asset (NPA) on 31.07.2014.

## Facts

TJSB Sahakari Bank Limited, the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Joshi Deodhar Engineering Company Limited, the Corporate Debtor, for initiating Corporate Insolvency Resolution Process (CIRP). The application was based on a default of ₹1,39,41,586.37/- along with interest as on 30.09.2018. The Corporate Debtor had availed credit facilities of ₹1,12,00,000/- from the Applicant, sanctioned as Cash Credit, Term Loan-I, and Term Loan-II. These facilities were secured by Mortgage, Promissory Note, Deed of Hypothecation, Letter of Lien, Set Off, and Deed of Guarantee. The Corporate Debtor defaulted in repayment, and the account was classified as NPA on 31.07.2014. The Applicant issued notices

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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 NCLT observed that the application was filed in the proper form and all necessary

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

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**Application:** The application was deemed complete as it fulfilled the requirements of Section

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## Parties

- **Judges:** Mr V.P.…; Mr Rajesh…; +1 more
- **Appellants:** TJSB Sahakari…
- **Respondents:** Joshi Deodhar…

## Timeline

- **2014-07-31 — Account Classified as…**: The account of the Corporate Debtor was…
- **2017-03-31 — Debt Acknowledged in…**: The Corporate Debtor acknowledged…

## 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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