# In the matter of Nakoda Ltd. C.P.(IB) No. 169-NCLT-AHM-2019

> NCLT judgment dated 2021-07-12. Citation: TCN-2021-NCLT-01776. Canara Bank filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 12 Jul 2021
- **Citation:** TCN-2021-NCLT-01776
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/nakoda-ltd-cpib-no-169-nclt-ahm-2019-98f7af00

## Summary

### Background

Canara Bank filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s. Nakoda Ltd. The application was filed due to a default amount of Rs. 375,27,17,744.84 along with interest and penal interest aggregating to Rs. 908,68,77,953.84. The date of default was 31.12.2019. The Financial Creditor had granted and disbursed loans to the Corporate Debtor from 1986 to 2013, totaling Rs. 428.00 crores. The Corporate Debtor's account was classified as NPA on 31.05.2014.

## Facts

Canara Bank, the financial creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate CIRP against Nakoda Ltd., the corporate debtor. The application was based on a default amount of Rs. 375,27,17,744.84, along with interest and penal interest aggregating to Rs. 908,68,77,953.84. The date of default was 31.12.2019. From 1986 to 2013, Canara Bank had granted and disbursed loans to Nakoda Ltd., totaling Rs. 428.00 crores. The account of the corporate debtor was classified as NPA on 31.05.2014. The last credit entry in the accounts of the corporate debtor was on 12.10.2015 for an amount of Rs. 5,55,988. The corporate debtor acknowledged its liability in its balance sheet and auditor's report as of 31.03.2015, 31.03.2016 and

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## Issues and analysis

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

**Ratio:** Section 7 of the Insolvency and Bankruptcy Code, 2016 allows a financial creditor to

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**Reasoning:** The court found that the corporate debtor had defaulted on its debt obligations to the

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**Interpretation:** Section 7 provides the mechanism for financial creditors to trigger the

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**Application:** The court applied Section 7 to the facts of the case, noting that the corporate

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## Parties

- **Judges:** Madan B.…; Virendra Kumar…
- **Appellants:** Canara…
- **Respondents:** Nakoda…

## Timeline

- **1986-01-01 — Loan Disbursem…**: Financial Creditor started granting and…
- **2013-01-01 — Loan Disburse…**: Financial Creditor stopped granting and…

## 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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