# In the matter of NS Paper Limited Company Petition (IB)No.395-ALD-2018

> NCLT judgment dated 2019-07-09. Citation: TCN-2019-NCLT-02611. The case involves an application filed by Union Bank of India, a financial creditor, under…

- **Court:** NCLT
- **Order date:** 9 Jul 2019
- **Citation:** TCN-2019-NCLT-02611
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/ns-paper-limited-company-petition-ibno395-ald-2018-9d593c4d

## Summary

### Background

The case involves an application filed by Union Bank of India, a financial creditor, 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, for initiating the Corporate Insolvency Resolution Process (CIRP) against the respondent/corporate debtor, M/s NS Papers Limited. The corporate debtor was a manufacturer of paper and paper products and had approached the financial creditor for various loans to expand its business. The account of the corporate debtor was declared NPA on 31.10.2018 due to default occurred.

## Facts

Union Bank of India, a financial creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s NS Papers Limited, the corporate debtor. NS Papers Limited, a manufacturer of paper and paper products, had obtained various loans from Union Bank of India for business expansion. The financial creditor sanctioned a term loan of Rs. 34,80,00,000 vide its sanction letter dated 08-03-2013. The corporate debtor's account was declared a Non-Performing Asset (NPA) on 31.10.2018 due to payment defaults. The financial creditor claimed a default amount of Rs. 82,26,39,988 as of 31.10.2018. The corporate debtor filed an affidavit stating it had no objection to the admission of the IB

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## Issues and analysis

### Issue 1: Whether the application filed by the financial creditor under Section 7 of the Insolvency and …

**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 application filed by Union Bank of India was complete and that

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**Interpretation:** Section 7 of the IBC provides the mechanism for a financial creditor to trigger

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**Application:** The court applied the provisions of Section 7 of the IBC to the facts of the

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## Parties

- **Judges:** Harihar Prakash…
- **Appellants:** Union of…
- **Respondents:** N.S. Papers…

## Timeline

- **1995-04-27 — Incorporation of…**: M/s NS Papers Ltd (formerly known as M/S…
- **2013-03-08 — Sanction of T…**: Financial creditors sanctioned the term loan of Rs. 34,80,00,000=00 vide its sanction…

## 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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