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

> NCLT judgment dated 2019-05-21. Citation: TCN-2019-NCLT-03237. 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-03237
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/multiwal-pulp-and-board-pvt-ltd-ib-343pb-2019-eade6e6a

## 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 payment of a decreed amount of Rs. 56,70,74,811.06/- along with interest, which was awarded by the Debts Recovery Tribunal, Delhi in O.A. No. 28/2016. The corporate debtor had previously challenged the decree, but their application for recall and subsequent appeal were dismissed.

## 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 payment of a decreed amount of Rs. 56,70,74,811.06/- along with interest. The Debts Recovery Tribunal, Delhi, had previously awarded this amount in O.A. No. 28/2016. The corporate debtor had challenged the decree by filing an application for recall, which was dismissed on 19.05.2017. An appeal filed by the corporate debtor under Section 20 of the Recovery of Debt due to Banks and Financial Institution act, 1993, was also dismissed by Debts Recovery Appellate Tribunal. The applicant bank had sanctioned a total sum

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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 under Section 7 of the IBC

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**Reasoning:** The Adjudicating Authority reasoned that the applicant bank had established a default in

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

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**Application:** In this case, the applicant bank, Corporation Bank, had obtained a decree

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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 sum of Rs. 50 Crores loan to M/s. Multiwal Pulp and…
- **2013-08-02 — Loan Documents…**: Applicant and respondent executed loan documents. Corporate Debtor also created equitable…

## 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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