# In the matter of Pawan Doot Estate Pvt. Ltd. IB-71-ND-2019

> NCLT judgment dated 2019-05-10. Citation: TCN-2019-NCLT-03339. Edelweiss Asset Reconstruction Company Ltd. filed an application under Section 7 of the…

- **Court:** NCLT
- **Order date:** 10 May 2019
- **Citation:** TCN-2019-NCLT-03339
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/pawan-doot-estate-pvt-ltd-ib-71-nd-2019-9c0c8477

## Summary

### Background

Edelweiss Asset Reconstruction Company Ltd. filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Pawan Doot Estate Pvt. Ltd. for initiating Corporate Insolvency Resolution Process (CIRP). The claim was for Rs.4,13,65,00,483/-. ECL Finance Limited had sanctioned a facility to Era Landmarks Limited, which was later assigned to Edelweiss Asset Reconstruction Company. The respondent, Pawan Doot Estate Pvt. Ltd., had provided a corporate guarantee for the loan.

## Facts

ECL Finance Limited sanctioned a facility of Rs. 170 crores to Era Landmarks Limited, with an applicable interest rate of 20.5% p.a., as per a sanction letter dated 04.10.2013, which Era Landmarks accepted on 07.10.2013. A loan agreement was executed between ECL and Era Landmarks on 07.10.2013, whereby ECL sanctioned Rs. 170 crores. Pawan Doot Estate Pvt. Ltd. executed a guarantee agreement in favor of ECL to secure the credit facility sanctioned to Era Landmarks. On 31.12.2015, Era Landmarks' account was classified as a Non-Performing Asset (NPA). ECL assigned the debt of Era Landmarks, along with all rights, title, and interest in the underlying securities and guarantees, to Edelweiss Asset Reconstruction Company pursuant to an Assignment Agreement dated 23.03.2017,

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## Issues and analysis

### Issue 1: Whether the application filed by Edelweiss Asset Reconstruction Company Ltd. under Section 7 of the …

**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 respondent had defaulted on the loan repayment, triggering the

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

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**Application:** The court applied Section 7 to the facts, noting that the respondent's failure

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## Parties

- **Judges:** Ina Mal…; V.K. SUB…
- **Appellants:** Edelweiss Asset…
- **Respondents:** Pawan Doot Estate…

## Timeline

- **2013-10-04 — Sanction Lett…**: ECL Finance Limited sanctioned a…
- **2013-10-07 — Loan Agreement…**: A loan agreement was executed…

## 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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