# In the matter of Kalptaru Alloys Private Limited

> NCLT judgment dated 2017-09-05. Citation: TCN-2017-NCLT-00470. Edelweiss Asset Reconstruction Co. Ltd., acting as Trustee of EARC Trust SC 143, filed an…

- **Court:** NCLT
- **Order date:** 5 Sept 2017
- **Citation:** TCN-2017-NCLT-00470
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/kalptaru-alloys-private-limited-8a5e0a2a

## Summary

### Background

Edelweiss Asset Reconstruction Co. Ltd., acting as Trustee of EARC Trust SC 143, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Kalptaru Alloys Private Limited, the Corporate Debtor. The application was based on the Corporate Debtor's default in repayment of debt assigned to Edelweiss by Indian Overseas Bank (IOB). The Respondent Company is a Private Limited Company incorporated under the Companies Act having its Registered Office in Thaltej Cross Road, Ahmedabad. The Authorised Share Capital of the Respondent Company is 7,50,00,000. The Paid-Up Capital of the Respondent Company is Rs. 3,90,25,000. The Main Object of the Respondent Company is to carry on

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## Facts

Edelweiss Asset Reconstruction Co. Ltd., acting as 'Trustee' of EARC Trust SC 143, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Kalptaru Alloys Private Limited, treating it as 'Corporate Debtor'. Kalptaru Alloys Private Limited is a Private Limited Company incorporated under the Companies Act, involved in manufacturing MS Ingots. The company had approached Indian Overseas Bank (IOB) in 2004 for credit facilities, which were sanctioned amounting to Rs. 28.61 Crores. The facilities included Cash Credit, Letter of Credit, Letter of Guarantee, and various Term Loan facilities. The company executed loan and security documents in favor of IOB. IOB executed an Assignment

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## Issues and analysis

### Issue 1: Whether a default has occurred within the meaning of Section 5 of the Insolvency and Bankruptcy …

**Ratio:** A 'financial debt' is defined under Section 5(8) of the IBC as a debt along with

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**Reasoning:** The Adjudicating Authority examined the Certificate under the Bankers' Books Evidence

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**Interpretation:** The interpretation of 'financial debt' and 'default' under the IBC is crucial

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**Application:** In this case, the Adjudicating Authority found that the Respondent Company had

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## Parties

- **Judges:** BIKKI RAVEENDRA…
- **Appellants:** Edelweiss Asset…
- **Respondents:** Kalptaru Alloys…; Kalptaru Alloys…

## Timeline

- **2004-01-01 — Credit Faci…**: Respondent approached Indian Overseas…
- **2012-02-23 — Sanction…**: IOB sanctioned credit facilities amounting…

## Legal provisions

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

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