# In the matter of Royal Wood Private Limited C.P. No. IB-510(PB)-2019

> NCLT judgment dated 2019-05-24. Citation: TCN-2019-NCLT-03208. Dena Bank (now known as Bank of Baroda) filed a petition under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 24 May 2019
- **Citation:** TCN-2019-NCLT-03208
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/royal-wood-private-limited-cp-no-ib-510pb-2019-594fe3f6

## Summary

### Background

Dena Bank (now known as Bank of Baroda) filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s. Royal Wood Private Limited, the Corporate Debtor. The Corporate Debtor is a company registered under the Companies Act, 1956, incorporated on 30.09.2008. The Financial Creditor disbursed loans aggregating to Rs. 13.69 crores from 2012 to 2015, with the last repayment made on 17.03.2015. The Corporate Debtor's account was classified as NPA on 30.09.2016. The Financial Creditor also filed an Original Application (O.A.) No. 567/2017 before the Debts Recovery Tribunal-II, Ahmedabad, for recovery of Rs. 12,27,51,410/- along with interest. The total amount in default as of 31.12.2018

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## Facts

Dena Bank (now Bank of Baroda) extended loan facilities to M/s. Royal Wood Private Limited. The loan amount aggregated to Rs. 13.69 crores, disbursed between 2012 and 2015. The last repayment was made on 17.03.2015. The Corporate Debtor defaulted on the repayment, leading to the account being classified as NPA on 30.09.2016. The Financial Creditor initiated recovery proceedings before the Debts Recovery Tribunal-II, Ahmedabad, with an outstanding amount of Rs. 12,27,51,410/- plus interest. As of 31.12.2018, the total default amounted to Rs. 14,68,09,987.71/- plus future and penal interest. The Corporate Debtor repeatedly sought time to file a reply but failed to do so, incurring costs. The Financial Creditor filed a petition under Section 7 of the Insolvency and

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## Issues and analysis

### Issue 1: Whether the requirements of Section 7 of the Insolvency and Bankruptcy Code, 2016, for initiating …

**Ratio:** Section 7 of the Insolvency and Bankruptcy Code, 2016, outlines the procedure for

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**Reasoning:** The court found that the Financial Creditor had demonstrated the existence of a debt and

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**Interpretation:** Section 7 is interpreted to mean that if a financial creditor can demonstrate a

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**Application:** In this case, the Financial Creditor provided evidence of disbursed loans,

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## Parties

- **Judges:** M. M. K…; S. K. MOH…
- **Appellants:** Dena…
- **Respondents:** M/s. ROYAL WOOD…

## Timeline

- **2008-09-30 — Incorporation of…**: M/s. Royal Wood Private Limited was…
- **2012-01-01 — Loan Disbur…**: Dena Bank disbursed loans to the Corporate Debtor from 2012 to 2015, aggregating to Rs.…

## 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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