# In the matter of K. K. Kadri Paper Mills Pvt. Ltd. C.P. (IB) No. 407-7-NCLT-AHM-2018

> NCLT judgment dated 2019-07-25. Citation: TCN-2019-NCLT-02301. The case involves an I.B. Petition filed by Edelweiss Asset Reconstruction Co. Ltd. (Financial…

- **Court:** NCLT
- **Order date:** 25 Jul 2019
- **Citation:** TCN-2019-NCLT-02301
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/k-k-kadri-paper-mills-pvt-ltd-cp-ib-no-407-7-nclt-ahm-2018-6557f4aa

## Summary

### Background

The case involves an I.B. Petition filed by Edelweiss Asset Reconstruction Co. Ltd. (Financial Creditor) under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against K.K. Kadri Paper Mills Pvt. Ltd. (Corporate Debtor). The Financial Creditor is acting as a trustee of EARC Trust, SC 31. The Corporate Debtor had availed credit facilities from Bank of Baroda, which were later assigned to Edelweiss. Despite reminders, the Corporate Debtor failed to make payments, leading to the issuance of demand notices. The Corporate Debtor acknowledged its debt but cited financial difficulties and a fire incident as reasons for its inability to pay. A one-time settlement was attempted but not fully executed.

## Facts

Edelweiss Asset Reconstruction Co. Ltd., acting as a financial creditor and trustee of EARC Trust SC 31, filed an I.B. Petition against K.K. Kadri Paper Mills Pvt. Ltd., the corporate debtor, under Section 7 of the Insolvency and Bankruptcy Code, 2016. K.K. Kadri Paper Mills Pvt. Ltd. was incorporated on 08.06.2005 with the CIN: U21010GJ2005PTC46207, with the main object of manufacturing craft paper. The corporate debtor approached Bank of Baroda in 2011 for business purposes, receiving credit facilities amounting to Rs.14.80 Crores, sanctioned on 06.01.2011. These facilities were renewed/enhanced until 2012. The corporate debtor executed hypothecation and guarantee agreements in favor of the bank. Despite repeated reminders, the corporate debtor failed to make

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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 Corporate Debtor had not expressly denied its

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**Interpretation:** Section 7 of the IBC is interpreted to mean that if the financial creditor

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**Application:** In this case, the Financial Creditor demonstrated that the Corporate Debtor had

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## Parties

- **Judges:** Harihar Prakash…; Manorama…
- **Appellants:** Edelweiss Asset…
- **Respondents:** K.K. Kadri Paper…
- **Advocates:** Baiju B…

## Timeline

- **2005-06-08 — Incorporation of…**: K.K. Kadri Paper Mills…
- **2011-01-06 — Sanction of Credit…**: Bank of Baroda sanctioned credit facilities amounting to Rs.14.80 Crores to the 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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