# In the matter of JVR Forgings Limited CP (IB) No.36-Chd-Pb-2018

> NCLT judgment dated 2018-09-12. Citation: TCN-2018-NCLT-00770. Allahabad Bank, a financial creditor, filed a petition under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 12 Sept 2018
- **Citation:** TCN-2018-NCLT-00770
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/jvr-forgings-limited-cp-ib-no36-chd-pb-2018-a12d2be6

## Summary

### Background

Allahabad Bank, a financial creditor, filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against JVR Forgings Limited, the corporate debtor. The corporate debtor was sanctioned various loan facilities amounting to ₹81,35,00,000 in 2014. The account became irregular and was declared NPA on 01.07.2017. The bank sought to recover the outstanding amount, which as of 20.11.2017, was ₹111,46,00,879/-.

## Facts

Allahabad Bank, the financial creditor, filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate CIRP against JVR Forgings Limited, the corporate debtor. JVR Forgings Limited was incorporated on 14.06.1996. The corporate debtor was sanctioned various loan facilities amounting to ₹81,35,00,000 in 2014. The loan facilities included Cash Credit Facility, Term Loans, and Working Capital Term Loans. The corporate debtor executed various loan documents, including Demand Promissory Notes, guarantee deed, hypothecation agreement, term loan agreement, and undertaking. The account of the corporate debtor became irregular and was declared NPA on 01.07.2017. The guarantor of the loan was issued a notice under Section 13(2) of the SARFAESI Act. The

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## Issues and analysis

### Issue 1: Whether the application filed by the financial creditor under Section 7 of the Insolvency and …

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

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**Reasoning:** The Adjudicating Authority found that the application was filed in the prescribed form

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

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**Application:** In this case, the Adjudicating Authority determined that the application was

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## Parties

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

## Timeline

- **2014-01-01 — Loan San…**: The respondent-corporate debtor was sanctioned…
- **2017-07-01 — Account Decla…**: The account of the respondent-corporate…

## 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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