# In the matter of Pacific Pipe Systems Private Limited C.P. (I B) No. 305-7-NCLT-AHM-2018

> NCLT judgment dated 2019-12-18. Citation: TCN-2019-NCLT-00095. Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 18 Dec 2019
- **Citation:** TCN-2019-NCLT-00095
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/pacific-pipe-systems-private-limited-cp-i-b-no-305-7-nclt-ahm-2018-9efc6c2e

## Summary

### Background

Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against Pacific Pipe Systems Private Limited due to defaults in repayment of term loans, FITL, and CC facilities. The bank, incorporated under the Banking Companies (Acquisition & Transfer of Undertakings) Act, 1970, claimed a total due of Rs. 49,35,84,364.77 as of 14.06.2018. The corporate debtor, incorporated on 08/03/2008, had availed various loan facilities from a consortium of member banks, including Bank of India, with a total aggregate limit of Rs. 61.85 Crores. The corporate debtor defaulted on 31/03/2014.

## Facts

Bank of India, a financial creditor, filed an I.B. Petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Pacific Pipe Systems Private Limited, a corporate debtor. The corporate debtor was incorporated on 08/03/2008 with CIN: U28110GJ2008PTC053182. The corporate debtor had a nominal share capital of Rs. 10,00,00,000/- and a paid-up capital of Rs. 5,00,00,000/-. The corporate debtor availed loan facilities from a consortium of member banks, including Bank of India, with a total aggregate limit of Rs. 61.85 Crores. The applicant sanctioned TL Loans and Cash Credit facilities for total aggregate Limit of Rs.61.85 Crores with terms and conditions including collateral securities of properties. The total aggregate limit of Rs.61.85 Crores (FB/NFB) was

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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 Adjudicating Authority observed that the Petitioner Bank had submitted the necessary

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

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**Application:** The court found that the application was complete and met the requirements of

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## Parties

- **Judges:** Harihar Prakash…; Prasanta Kumar…
- **Appellants:** Bank of…
- **Respondents:** Pacific Pipe…

## Timeline

- **2008-03-08 — Incorporation of…**: Pacific Pipe Systems Private…
- **2008-06-21 — Sanction of Loan…**: The Applicant Bank sanctioned TL Loans and Cash Credit facilities for total aggregate…

## 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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