# In the matter of Precision Fasteners Limited  C.P. No. 1339-I&BP-2017

> NCLT judgment dated 2017-11-07. Citation: TCN-2017-NCLT-00236. Asset Reconstruction Company (India) Ltd. (ARCIL), acting as a Trustee of ARCIL - Precision…

- **Court:** NCLT
- **Order date:** 7 Nov 2017
- **Citation:** TCN-2017-NCLT-00236
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/precision-fasteners-limited-cp-no-1339-ibp-2017-635335f4

## Summary

### Background

Asset Reconstruction Company (India) Ltd. (ARCIL), acting as a Trustee of ARCIL - Precision Fasteners Ltd. - Trust, filed a petition to initiate Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, Precision Fasteners Ltd. (PFL). The petition alleges that PFL is liable to pay a sum of ₹129,34,66,897.7 as of 2017-07-13 and defaulted on 2002-01-01. ARCIL acquired some financial assets of PFL from Industrial Development Bank of India (IDBI) for a consideration of ₹4.64 crores via an Assignment Agreement dated 2003-12-30.

## Facts

Asset Reconstruction Company (India) Ltd. (ARCIL) filed a petition to initiate CIRP against Precision Fasteners Ltd. (PFL), claiming a default of ₹129,34,66,897.7 as of 2017-07-13, with the original default occurring on 2002-01-01. ARCIL acquired financial assets of PFL from IDBI through an Assignment Agreement dated 2003-12-30 for ₹4.64 crores. The assignment related to assets mortgaged with IDBI for a working capital facility. PFL argued that ARCIL's claim was not valid, the certificate under the Bankers Book Evidence Act was not satisfactory, and the claim was time-barred. The AAIFR had dismissed an appeal filed by the Corporate Debtor on 2015-10-12. The court noted that the limitation period would start after the termination of proceedings before BIFR or AAIFR, and

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the …

**Ratio:** Section 7 of the I&B Code, 2016, allows a financial creditor to initiate CIRP against

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**Reasoning:** The Bench noted that the Corporate Debtor defaulted in making payments and that there

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**Interpretation:** Section 7 provides the mechanism for a financial creditor to initiate CIRP when

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**Application:** The court found that the application was complete as the Corporate Debtor had

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## Parties

- **Judges:** B.S.V. Prakash…; V. Nallasen…
- **Appellants:** Asset Reconstructi…
- **Respondents:** Precision…

## Timeline

- **2002-01-01 — Default…**: Precision Fasteners Ltd. (PFL)…
- **2003-12-30 — Assignment Ag…**: ARCIL acquired financial assets of…

## 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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