# In the matter of Scope Properties Private Limited CP-1055-IB-2018

> NCLT judgment dated 2019-03-27. Citation: TCN-2019-NCLT-04296. The case involves an application filed by Edelweiss Asset Reconstruction Company Limited…

- **Court:** NCLT
- **Order date:** 27 Mar 2019
- **Citation:** TCN-2019-NCLT-04296
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/scope-properties-private-limited-cp-1055-ib-2018-5e437b7c

## Summary

### Background

The case involves an application filed by Edelweiss Asset Reconstruction Company Limited (EARC), the Financial Creditor, against Scope Properties Private Limited, the Corporate Debtor, for initiation of Corporate Insolvency Resolution Process (CIRP) under Section 7 of the Insolvency and Bankruptcy Code, 2016. The Financial Creditor claimed that the Corporate Debtor defaulted in repaying an amount of ₹7,06,55,986 as on 17.07.2018. The Financial Creditor is the assignee of UCO Bank. The Corporate Debtor had availed credit facilities under UCO Rent Scheme, and an equitable mortgage was created. The Corporate Debtor's loan account was classified as Non-Performing Asset (NPA) with effect from 31.03.2011. The Financial Creditor issued a demand notice under section 13(2) of

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## Facts

Edelweiss Asset Reconstruction Company Limited (EARC), acting as the Financial Creditor and assignee of UCO Bank, filed an application against Scope Properties Private Limited, the Corporate Debtor, for initiating Corporate Insolvency Resolution Process (CIRP). The basis for the application was the Corporate Debtor's default in repaying a debt of ₹7,06,55,986 as of 17.07.2018. The Corporate Debtor had availed credit facilities under the UCO Rent Scheme, securing the loan with an equitable mortgage created on 22.08.2008. The loan account was classified as a Non-Performing Asset (NPA) on 31.03.2011. EARC issued a demand notice on 15.06.2017, seeking ₹5,30,63,400 due as of 31.05.2017. The Corporate Debtor contested the outstanding amount, citing a restructuring agreement.

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## Issues and analysis

### Issue 1: Whether the Financial Creditor has established the existence of a debt and default by the Corporate …

**Ratio:** Section 7 of the Insolvency and Bankruptcy Code, 2016 requires the Financial Creditor to

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**Reasoning:** The Tribunal examined the documents submitted by the Financial Creditor, including loan

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**Interpretation:** Section 7 of the IBC, 2016 is interpreted to mean that if a financial creditor

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**Application:** In this case, the Financial Creditor provided sufficient documentation to prove

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## Parties

- **Judges:** B.S.V. PRAKAKASH…; S. VIJAYARA…
- **Appellants:** M/s. Edelweiss…
- **Respondents:** M/s. Scope…

## Timeline

- **2007-10-05 — Incorporation of…**: Edelweiss Asset Reconstruction…
- **2008-08-22 — Equitable M…**: Equitable Mortgage by way of deposit 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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