# In the matter of Kashyap Motors India Pvt. Ltd. C.P. No. (IB)-1528(PB)-2018

> NCLT judgment dated 2019-03-05. Citation: TCN-2019-NCLT-04582. Dena Bank, the financial creditor, filed a petition under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 5 Mar 2019
- **Citation:** TCN-2019-NCLT-04582
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/kashyap-motors-india-pvt-ltd-cp-no-ib-1528pb-2018-a7849fdb

## Summary

### Background

Dena Bank, the financial creditor, filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s. Kashyap Motors India Private Limited, the corporate debtor. The financial creditor claimed that the corporate debtor had defaulted on loan facilities. The corporate debtor admitted to availing the loan facilities and defaulting on repayment. The financial creditor had issued a notice under Section 13(2) of the SARFAESI Act, 2002, and also took symbolic possession of the mortgaged property. The corporate debtor proposed a one-time settlement, which was not accepted by the financial creditor.

## Facts

Dena Bank, a financial creditor, filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s. Kashyap Motors India Private Limited, the corporate debtor. The financial creditor had sanctioned various credit facilities to the corporate debtor, including cash credit, term loans, and bank guarantees, totaling Rs. 940 lakhs initially, which was later enhanced to Rs. 1865.56 lakhs. These loans were secured by hypothecation of stocks and book debts, as well as a mortgage of immovable property. The corporate debtor defaulted on the repayment of these loan facilities, leading to the account being declared as a Non-Performing Asset (NPA) on 2018-02-28. The financial creditor issued a notice

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## Issues and analysis

### Issue 1: Whether the requirements of Section 7 of the Insolvency and Bankruptcy Code, 2016, for initiation …

**Ratio:** Section 7 of the IBC allows a financial creditor to initiate CIRP against a corporate

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**Reasoning:** The court observed that the financial creditor had submitted a complete application under

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**Interpretation:** Section 7 of the IBC provides a mechanism for financial creditors to initiate

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**Application:** In this case, the court found that the financial creditor had fulfilled all the

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## Parties

- **Judges:** M. M. K…; Pradeep R.…
- **Appellants:** Dena…
- **Respondents:** M/S. KASHYAP…

## Timeline

- **1997-02-03 — Incorporation of…**: M/s. Kashyap Motors India Private Limited was…
- **2017-03-11 — Power of At…**: Ms. Vineeta Verma was authorized by the power of…

## 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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