# 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-03203. 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-03203
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/royal-wood-private-limited-cp-no-ib-510pb-2019-a7b3460a

## 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 Financial Creditor claimed default on loan facilities availed by the Corporate Debtor, secured by mortgages. The Corporate Debtor's account was classified as NPA on 30.09.2016. The Financial Creditor also filed an Original Application before the Debts Recovery Tribunal-II, Ahmedabad, for recovery of the outstanding amount. The Corporate Debtor sought time multiple times to file a reply, vakalatnama, and resolution, but failed to do so, resulting in costs being imposed. The Financial Creditor proposed Mr. Prawin Charan Dwary

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## Facts

Dena Bank (now Bank of Baroda) disbursed loans aggregating to Rs. 13.69 crores to M/s. Royal Wood Private Limited from 2012 to 2015. The last repayment was made on 17.03.2015. The loan facilities were secured by mortgages. The Corporate Debtor's account was classified as NPA on 30.09.2016. The Financial Creditor 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. As of 31.12.2018, the total amount in default was 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, resulting in costs being imposed. The Financial Creditor proposed Mr. Prawin Charan Dwary as the Resolution Professional.

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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, allows a financial creditor to

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**Reasoning:** The court found that the Financial Creditor had submitted sufficient evidence to prove

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**Interpretation:** Section 7 of the IBC is interpreted to provide a mechanism for financial

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**Application:** The court applied the provisions of Section 7 to the facts of the case, finding

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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 aggregating to Rs. 13.69 crores to M/s. Royal Wood Private…

## 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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