# In the matter of Mir Kings Industries Pvt. Ltd., CP (IB) No.272-Chd-J&K-2018

> NCLT judgment dated 2020-01-22. Citation: TCN-2020-NCLT-02214. The Jammu & Kashmir Bank Ltd. filed an application under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 22 Jan 2020
- **Citation:** TCN-2020-NCLT-02214
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/mir-kings-industries-pvt-ltd-cp-ib-no272-chd-jk-2018-e5d00165

## Summary

### Background

The Jammu & Kashmir Bank Ltd. filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of the Corporate Insolvency Resolution Process (CIRP) against Mir Kings Industries Pvt. Ltd., the corporate debtor. The bank claimed that the corporate debtor had defaulted on a term loan and a working capital facility. The corporate debtor argued that there was a pre-existing dispute and that an OTS proposal was pending. The bank contended that the OTS proposal was revoked due to non-payment.

## Facts

Jammu & Kashmir Bank Ltd. (the financial creditor) filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Mir Kings Industries Pvt. Ltd. (the corporate debtor). The corporate debtor had availed a term loan of ₹16.25 Crores and a working capital facility from the financial creditor. The credit facilities were disbursed on 26.11.2013 and 01.09.2014, respectively. The corporate debtor defaulted in making payments, and its account was declared a Non-Performing Asset (NPA) on 31.03.2016. The financial creditor issued a notice under the SARFAESI Act on 06.02.2017. The corporate debtor contended that there was a pre-existing dispute and that an OTS proposal was pending. The financial

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## Issues and analysis

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

**Ratio:** Section 7(5) of the IBC provides for admission of the application where the Adjudicating

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**Reasoning:** The NCLT considered the arguments of both parties and examined the documents and records.

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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 NCLT applied the provisions of Section 7 of the IBC to the facts of the

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## Parties

- **Judges:** Ajay Kumar…; Pradeep R.…
- **Appellants:** Jammu & Kashmir…
- **Respondents:** Mir Kings…

## Timeline

- **1994-03-30 — Special Power of…**: Special Power of Attorney dated 30.03.1994, in favour of Mr. Mohd. Hanief Kirmani to be…
- **2013-11-02 — Term Loan and…**: Copy of term loan and securities agreement dated 02.11.2013 is attached as Annexure P-3…

## 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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