# In the matter of Jyoti Ltd.  Intervention Petition No. 79 of 2018 in C.P. (IB) No. 262-7-NCLT-AHM-2018

> NCLT judgment dated 2020-11-12. Citation: TCN-2020-NCLT-00258. The case involves an application under Section 7 of the Insolvency and Bankruptcy Code, 2016…

- **Court:** NCLT
- **Order date:** 12 Nov 2020
- **Citation:** TCN-2020-NCLT-00258
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/jyoti-ltd-intervention-petition-no-79-of-2018-in-cp-ib-no-262-7-nclt-ahm-2018-634268c0

## Summary

### Background

The case involves an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) read with Rule 4 of the Insolvency and Bankruptcy Application to Adjudicating Authority Rules, 2016, for initiating Corporate Insolvency Resolution Process (CIRP) against M/s. Jyoti Limited. The application was filed jointly by Central Bank of India and State Bank of India, who are financial creditors. Rare Asset Reconstruction Ltd. filed an intervention petition (Inv. P. No. 79 of 2018) during the pendency of the main petition, seeking rejection of the main application based on acquiring a significant portion of the corporate debtor's debt.

## Facts

M/s. Jyoti Limited, a public limited company, is the corporate debtor. Central Bank of India and State Bank of India jointly filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate CIRP against Jyoti Limited. The corporate debtor availed credit facilities from a consortium of banks, including Central Bank of India, Dena Bank, Bank of Maharashtra, and State Bank of India. The total debt sanctioned by Central Bank of India was Rs. 481.71 crores, and by State Bank of India was Rs. 48.58 crores. The date of default for Central Bank of India was 29.09.2015, and for State Bank of India, it was 25.02.2013. State Bank of India had also filed O.A. No. 1189 of 2017 before the Debts Recovery Tribunal-II at Ahmedabad. The corporate debtor

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016, for initiating …

**Ratio:** Section 7 of the IB Code allows a financial creditor, either individually or jointly with

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**Reasoning:** The Adjudicating Authority found that the corporate debtor owed a financial debt to State

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**Interpretation:** Section 7 of the IB Code is interpreted to mean that as long as a financial

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**Application:** The ratio and reasoning were applied to the facts of the case, where State Bank

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## Parties

- **Judges:** Manorama…; Chockalingam…
- **Appellants:** Central Bank of…
- **Respondents:** Jyoti Li…; M/S Jyoti…

## Timeline

- **2013-03-31 — CDR Cut-of…**: Cut-off date for Corporate Debt…
- **2013-05-12 — CDR Proposal S…**: The Corporate Debt Restructuring…

## 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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