# In the matter of Kothari Food & Frangrances Pvt. Ltd. Company Petition (IB) No. 310 of 2018

> NCLT judgment dated 2018-10-18. Citation: TCN-2018-NCLT-00533. Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 18 Oct 2018
- **Citation:** TCN-2018-NCLT-00533
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/kothari-food-frangrances-pvt-ltd-company-petition-ib-no-310-of-2018-5af8b34f

## Summary

### Background

Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of the Corporate Insolvency Resolution Process (CIRP) against M/s. Kothari Food & Fragrances Pvt. Ltd. The application was filed due to the corporate debtor's default in payment of financial debt. Despite service of notice, the corporate debtor did not respond or appear before the court.

## Facts

Bank of India, a financial creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s. Kothari Food & Fragrances Pvt. Ltd., the corporate debtor, due to default in payment of financial debt. The corporate debtor was declared NPA as on 31.12.2015. The amount claimed to be in default as on 14.06.2016 was Rs. 1,54,23,61,766.02, excluding interest. The Bank had filed O.A. No. 108 of 2017 before Debts Recovery Tribunal, Allahabad, for a recovery of Rs. 192,31,49,367.00, which was allowed on 07.06.2017. As of 14.08.2018, the total amount due was Rs. 253,19,98,266.70, including interest. Despite notice, the corporate debtor did not appear or file any reply.

## Issues and analysis

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

**Ratio:** Section 7(5)(a) of the Insolvency and Bankruptcy Code, 2016, states that if the

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**Reasoning:** The court, after hearing the counsel for the financial creditor, found that the

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

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**Application:** The court applied Section 7(5)(a) of the Code to the facts of the case and

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## Parties

- **Judges:** BIKKI RAVEENDRA…; Saroj Ra…
- **Appellants:** Bank of…
- **Respondents:** M/s. Kothari Food…

## Timeline

- **2015-12-31 — Corporate Debtor…**: The corporate debtor, M/s. Kothari Food & Fragrances Pvt. Ltd., was declared a…
- **2016-06-14 — Amount D…**: As on 14.06.2016, a sum of Rs.…

## 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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