# In the matter of Mount Shivalik Industries Limited C.P. No. IB-86-(ND)-2017

> NCLT judgment dated 2018-06-12. Citation: TCN-2018-NCLT-01287. Oriental Bank of Commerce filed an application under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 12 Jun 2018
- **Citation:** TCN-2018-NCLT-01287
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/mount-shivalik-industries-limited-cp-no-ib-86-nd-2017-69f0d889

## Summary

### Background

Oriental Bank of Commerce filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Mount Shivalik Industries Limited. The corporate debtor was incorporated on 08.01.1993 and is engaged in manufacturing and marketing of beer. The bank had sanctioned financial facilities to the corporate debtor on 08.10.2014, including a cash credit of Rs. 14 crores, a letter of credit of Rs. 3 crores, a bank guarantee of Rs. 0.50 crores, and a term loan of Rs. 1.03 crores.

## Facts

Oriental Bank of Commerce (the Applicant) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Mount Shivalik Industries Limited (the Respondent/Corporate Debtor). The Corporate Debtor was incorporated on 08.01.1993 and is engaged in manufacturing and marketing of beer. The Applicant had sanctioned financial facilities to the Corporate Debtor on 08.10.2014, including a cash credit of Rs. 14 crores, a letter of credit of Rs. 3 crores, a bank guarantee of Rs. 0.50 crores, and a term loan of Rs. 1.03 crores. The Corporate Debtor signed and executed various security and loaning documents to secure the financial facilities. Mr. B. D. Bali, Sh. Sanjiv Bali, and Sh. Rajiv Bali

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## Issues and analysis

### Issue 1: Whether the Applicant falls within the definition of a Financial Creditor as per Section 5(7) of …

**Ratio:** Section 5(7) of the Insolvency and Bankruptcy Code, 2016, defines a Financial Creditor as

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**Reasoning:** The Tribunal observed that the Applicant, Oriental Bank of Commerce, had extended

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**Interpretation:** The definition of Financial Creditor under Section 5(7) is interpreted to

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**Application:** The Applicant, Oriental Bank of Commerce, falls squarely within the definition

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## Parties

- **Judges:** R. VARADH…; V.K. SUB…
- **Appellants:** Oriental Bank of…
- **Respondents:** Mount Shivalik…

## Timeline

- **1993-01-08 — Incorporation of…**: Mount Shivalik Industries…
- **2014-10-08 — Sanction of Financial…**: Oriental Bank of Commerce sanctioned financial facilities to Mount Shivalik Industries…

## 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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