# In the matter of Shahjahanpur Edibles Private Limited Company Petition (IB)No.56-ALD-2019

> NCLT judgment dated 2019-09-27. Citation: TCN-2019-NCLT-01186. The case involves a Company Petition (IB) No. 56/ALD/2019 filed by Corporation Bank under…

- **Court:** NCLT
- **Order date:** 27 Sept 2019
- **Citation:** TCN-2019-NCLT-01186
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/shahjahanpur-edibles-private-limited-company-petition-ibno56-ald-2019-e77f0c96

## Summary

### Background

The case involves a Company Petition (IB) No. 56/ALD/2019 filed by Corporation Bank under Section 7 of the Insolvency and Bankruptcy Code, 2016, read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rule, 2016, for initiating Corporate Insolvency Resolution Process (CIRP) against M/s Shahjahanpur Edibles Private Limited. The corporate debtor had availed cash credit and term loan facilities from the applicant bank, which were later enhanced. The corporate debtor failed to maintain regular accounts and pay stipulated installments, leading to the account being classified as NPA on 31.03.2018. The financial creditor then recalled the outstanding amounts and filed the present application before the NCLT.

## Facts

Corporation Bank, a banking institution, filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against M/s Shahjahanpur Edibles Private Limited, a private limited company incorporated on 12.03.2014. The corporate debtor had availed cash credit and term loan facilities from the applicant bank. Initially, the corporate debtor availed a cash credit facility of Rs. 3,00,00,000/- and a term loan facility of Rs. 7,00,00,000/-, which were secured by various documents. Later, the facilities were enhanced to Rs. 6,00,00,000/- and Rs. 5,11,74,000/- respectively. To secure the enhanced credit facilities of Rs. 11,11,84,000/-, several individuals provided personal guarantees. The corporate debtor failed to maintain regular accounts and pay stipulated

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## Issues and analysis

### Issue 1: Whether there is a duly …

**Ratio:** The ratio is based on Section 7 of the IBC, which allows a financial creditor to initiate

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**Reasoning:** The court reasoned that the financial creditor had submitted sufficient evidence,

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**Interpretation:** The interpretation of Section 7 of the IBC, as clarified by the Supreme Court,

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**Application:** In this case, the court applied the ratio by examining the documents submitted

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## Parties

- **Judges:** Sh. Abni Ranjan…
- **Appellants:** Corporatio…
- **Respondents:** M/s SHAHJAHANPUR…

## Timeline

- **1906-03-12 — Incorporation of…**: Corporation Bank was incorporated under the Banking Companies (Acquisition and Transfer…
- **2014-03-12 — Incorporation of…**: M/s Shahjahanpur Edibles…

## 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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