# In the matter of Oswal Spinning and Weaving Mills Ltd. CP (IB) No. 136-Chd-Pb-2018

> NCLT judgment dated 2018-10-30. Citation: TCN-2018-NCLT-00447. UCO Bank filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against…

- **Court:** NCLT
- **Order date:** 30 Oct 2018
- **Citation:** TCN-2018-NCLT-00447
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/oswal-spinning-and-weaving-mills-ltd-cp-ib-no-136-chd-pb-2018-4b8a6ca1

## Summary

### Background

UCO Bank filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Oswal Spinning and Weaving Mills Ltd., seeking initiation of the Corporate Insolvency Resolution Process (CIRP). The corporate debtor was incorporated on 26.02.1965 and is engaged in manufacturing and wholesale trading of textiles. UCO Bank claimed that the corporate debtor had been availing credit facilities since 2005 and was in default of ₹19,75,00,932.20 with interest up to 30.09.2017. The corporate debtor contested the petition, arguing that no amount was due and payable to UCO Bank and that it had a counter-claim against the bank.

## Facts

UCO Bank filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Oswal Spinning and Weaving Mills Ltd. The corporate debtor was incorporated on 26.02.1965 and is engaged in manufacturing and wholesale trading of textiles. The corporate debtor had been availing credit facilities from UCO bank since 2005. The last sanctioned limits on 20.05.2015 were as follows: CC hypothecation and CC 200.00 Lacs, EPC (ENHANCED) 1345.00 Lacs, FBP/FBN(REDUCED) 315.00 Lacs, ILC 80.00 Lacs, BG 8.00 Lacs. The amount claimed to be in default is ₹19,75,00,932.2 with interest upto 30.09.2017. The account was classified as NPA on 31.12.2015. The corporate debtor filed reply/objections stating that no amount is due and payable to UCO Bank and that it has to recover

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## Issues and analysis

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

**Ratio:** Section 7(5)(a) of the IBC states that the Adjudicating Authority may admit an

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**Reasoning:** The Tribunal considered the submissions of both parties and examined the documents on

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**Interpretation:** The legal principle is that an application under Section 7 of the IBC is

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**Application:** In this case, the Tribunal found that the application filed by UCO Bank met the

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## Parties

- **Judges:** R.P.Nag…; Pradeep R.…
- **Appellants:** UCO B…
- **Respondents:** Oswal Spinning…

## Timeline

- **1965-02-26 — Incorporation of…**: Oswal Spinning and Weaving…
- **2005-01-01 — Loan Avai…**: Oswal Spinning and Weaving Mills Ltd. started…

## 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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