# In the matter of Sarnamoy Plastic Sack Manufacturing Private Limited C.P. (IB) No. 207-KB-2019

> NCLT judgment dated 2019-07-23. Citation: TCN-2019-NCLT-02356. The case involves an application filed by United Bank of India under Section 7 of the…

- **Court:** NCLT
- **Order date:** 23 Jul 2019
- **Citation:** TCN-2019-NCLT-02356
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/sarnamoy-plastic-sack-manufacturing-private-limited-cp-ib-no-207-kb-2019-760263cc

## Summary

### Background

The case involves an application filed by United Bank of India under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Sarnamoy Plastic Sack Manufacturing Private Limited. The Corporate Debtor had availed loan facilities from the Financial Creditor, executed loan agreements and security documents, and subsequently defaulted on repayment, leading to the classification of its accounts as Non-Performing Assets (NPA). The Financial Creditor sought initiation of the Corporate Insolvency Resolution Process (CIRP).

## Facts

United Bank of India, a financial creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Sarnamoy Plastic Sack Manufacturing Private Limited, the corporate debtor. The corporate debtor was incorporated on January 23, 2013, and engaged in manufacturing plastic woven stocks. The corporate debtor requested a project loan and working capital from the financial creditor. The corporate debtor mortgaged its unit and later passed a board resolution to mortgage its building, machinery, and stocks. The financial creditor sanctioned credit facilities. The corporate debtor secured the term loan by hypothecation and mortgage. The corporate debtor was not making sufficient transactions, and the new project could not generate sufficient

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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 considered the documents filed by the Financial Creditor,

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

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**Application:** The Financial Creditor, United Bank of India, demonstrated that the Corporate

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## Parties

- **Judges:** Jinan…; Harish Chander…
- **Appellants:** United Bank of…
- **Respondents:** Sarnamoy Plastic…; Sarnamoy Plastic…
- **Advocates:** Pralay…

## Timeline

- **2013-01-23 — Incorporation of…**: Sarnamoy Plastic Sack Manufacturing…
- **2013-07-13 — Permission from Falta…**: Corporate Debtor sought permission from Falta…

## 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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