# In the matter of Multiwal Pulp and Board Pvt. Ltd. (IB)-343(PB)-2019

> NCLT judgment dated 2019-05-21. Citation: TCN-2019-NCLT-03231. Corporation Bank filed an application under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 21 May 2019
- **Citation:** TCN-2019-NCLT-03231
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/multiwal-pulp-and-board-pvt-ltd-ib-343pb-2019-434a87cc

## Summary

### Background

Corporation Bank filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s. Multiwal Pulp and Board Mills Private Limited, the corporate debtor. The application was based on a default in repayment of a decreed amount. The corporate debtor argued difficulties faced due to closure of production activities directed by the Central Pollution Control Board. The applicant bank claimed a decreed amount of Rs. 56,70,74,811.06/- along with interest was due from the respondent company, based on a judgment dated 15.10.2018 passed by the Debts Recovery Tribunal.

## Facts

Corporation Bank filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s. Multiwal Pulp and Board Mills Private Limited. The application was based on a default in repayment of a decreed amount of Rs. 56,70,74,811.06/- along with interest. This amount was awarded by the Debts Recovery Tribunal, Delhi, in O.A. No. 28/2016, in favor of Corporation Bank and against M/s. Multiwal Pulp and Board Mills Private Limited. The loan facilities, totaling Rs. 50 Crores, were sanctioned on 01.04.2013, including a cash credit facility of Rs. 30 Crores and an Inland/Import Letter of Credit facility of Rs. 20 Crores. The corporate debtor had created an equitable mortgage by depositing the

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## Issues and analysis

### Issue 1: Whether the application filed by Corporation Bank under Section 7 of the Insolvency and Bankruptcy …

**Ratio:** The Adjudicating Authority is bound to admit the application if it is satisfied that a

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**Reasoning:** The Adjudicating Authority considered the application, the documents submitted, and 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:** In this case, the Adjudicating Authority found that the applicant bank had

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## Parties

- **Judges:** CHIEF JUSTICE…; S. K. MOH…
- **Appellants:** Corporatio…
- **Respondents:** M/s. Multiwal…

## Timeline

- **2013-04-01 — Loan Sanc…**: Corporation Bank sanctioned a total loan of Rs. 50 Crores to M/s. Multiwal Pulp and Board…
- **2013-02-19 — Closure Dir…**: Central Pollution Control Board directed the immediate closure of the production…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60 — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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