# In the matter of Krishna Knitwear Technology Ltd. C.P. (I.B) No. 279-7-NCLT-AHM-2018

> NCLT judgment dated 2020-01-13. Citation: TCN-2020-NCLT-02358. Andhra Bank filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 13 Jan 2020
- **Citation:** TCN-2020-NCLT-02358
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/krishna-knitwear-technology-ltd-cp-ib-no-279-7-nclt-ahm-2018-16c0d3c6

## Summary

### Background

Andhra Bank filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against Krishna Knitwear Technology Limited due to defaults in repayment of OCC/FITL facilities. The bank claimed that the corporate debtor had failed to meet its financial obligations despite restructuring efforts and had been declared a Non-Performing Asset (NPA). The application was supported by various loan documents, financial statements, and CIBIL reports.

## Facts

Andhra Bank, a financial creditor, filed a petition under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Krishna Knitwear Technology Limited, the corporate debtor. The corporate debtor had availed financial assistance from various banks and financial institutions since 2001, including Term Loans, Cash Credit, and Working Capital Demand Loans. These loans were secured by hypothecation of movables, mortgage of immovable properties, and personal guarantees. A Working Capital Consortium was formed, led by Andhra Bank. The corporate debtor approached the CDR Cell for restructuring of its Working Capital and Term Loan facilities, which was approved. However, despite the restructuring, the

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## Issues and analysis

### Issue 1: Whether the application filed by Andhra Bank under Section 7 of the IBC, 2016, for initiating CIRP …

**Ratio:** Section 7 of the IBC, 2016, allows a financial creditor to initiate CIRP against a

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**Reasoning:** The Adjudicating Authority considered the documents submitted by Andhra Bank, including

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**Interpretation:** Section 7 of the IBC, 2016, provides a mechanism for financial creditors to

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**Application:** In this case, the Adjudicating Authority found that Andhra Bank had established

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## Parties

- **Judges:** Harihar Prakash…; Prasanta Kumar…
- **Appellants:** Andhra…
- **Respondents:** Krishna Knitwear…

## Timeline

- **2001-01-01 — Financial Ass…**: Respondent Company availed financial assistance from various banks and financial…
- **2012-06-29 — Account Decla…**: The account of the Respondent company became irregular and was declared as NPA on…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 19 — Personnel to extend co-operation to interim…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-19)

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