# In the matter of Kushal International Limited Company Petition (IB)No. 124-ALD-2018

> NCLT judgment dated 2018-05-08. Citation: TCN-2018-NCLT-01441. The Jammu and Kashmir Bank Limited filed a petition under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 8 May 2018
- **Citation:** TCN-2018-NCLT-01441
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/kushal-international-limited-company-petition-ibno-124-ald-2018-aac80b3a

## Summary

### Background

The Jammu and Kashmir Bank Limited filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rule, 2016, for initiating the Corporate Insolvency Resolution Process (CIRP) against M/s Kushal International Limited. The corporate debtor had approached the financial creditor in December 2012 seeking financial assistance in the form of cash credit facility and term loans. The account of the corporate debtor was classified as Non-Performing Asset (NPA) on 31.12.2014.

## Facts

Jammu and Kashmir Bank Limited, the 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 Kushal International Limited, the corporate debtor. The corporate debtor had approached the financial creditor in December 2012 seeking financial assistance in the form of cash credit facility and term loans amounting to Rs. 4,90,00,000. The financial creditor further stated that a term loan of Rs. 77,00,000 was approved on 01.02.2013. The account of the corporate debtor was classified as Non-Performing Asset (NPA) on 31.12.2014. The total amount of debt granted to the corporate debtor was Rs. 2,00,00,000 (Cash Credit), Rs. 2,90,00,000 (Term Loan), Rs. 1,85,00,000

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## Issues and analysis

### Issue 1: Whether there is a default in the payment of …

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

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**Reasoning:** The Adjudicating Authority perused the records and found that the amount claimed to be in

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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 Adjudicating Authority applied the provisions of Section 7(5)(a) of the IBC

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## Parties

- **Judges:** SH. V.P.…; Ms Saroj R…
- **Appellants:** Jammu And Kashmir…
- **Respondents:** M/s Kushal…

## Timeline

- **1938-10-01 — Incorporation of…**: The Applicant Jammu and Kashmir Bank Limited is a Public Limited Company incorporated on…
- **1995-12-05 — Incorporation of…**: The Respondent/Corporate Debtor M/s Kushal International Limited is a company…

## 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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