# In the matter of Shree Coke Mfg. Co. Pvt. Ltd. CP (IB) No. 571-KB-2017

> NCLT judgment dated 2017-12-22. Citation: TCN-2017-NCLT-00012. Edelweiss Asset Reconstruction Co. Ltd. filed an application under Section 7 of the Insolvency…

- **Court:** NCLT
- **Order date:** 22 Dec 2017
- **Citation:** TCN-2017-NCLT-00012
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/shree-coke-mfg-co-pvt-ltd-cp-ib-no-571-kb-2017-727b2386

## Summary

### Background

Edelweiss Asset Reconstruction Co. Ltd. filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Shree Coke Manufacturing Co. Pvt. Ltd., a corporate debtor, for initiating the corporate insolvency resolution process. The application was based on the corporate debtor's default in repaying a loan obtained from Bank of India, which was later assigned to Edelweiss. The corporate debtor raised objections, including challenges to the validity of the assignment agreement and the applicant's status as a financial creditor.

## Facts

Edelweiss Asset Reconstruction Co. Ltd. filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Shree Coke Manufacturing Co. Pvt. Ltd. Shree Coke Manufacturing Co. Pvt. Ltd. had availed credit facilities from Bank of India, amounting to Rs. 25 crore, sanctioned on 15/12/2011. The loan was secured by mortgaging immovable properties, hypothecating movable assets, and providing personal guarantees. Shree Coke Manufacturing Co. Pvt. Ltd. defaulted on repayments starting 31/3/2013. As of 25/10/2017, the outstanding amount was Rs. 37,25,85,833/-. Bank of India assigned its rights and liabilities related to the loan account to Edelweiss Asset Reconstruction Co. Ltd. via a registered assignment agreement dated 26/3/2014. Edelweiss issued a

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## Issues and analysis

### Issue 1: Whether Edelweiss Asset Reconstruction Co. Ltd. qualifies as a financial creditor under Section …

**Ratio:** Section 5(7) of the I&B Code defines a 'financial creditor' as any person to whom a

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**Reasoning:** The court reasoned that the assignment agreement (Annexure T) was a legally executed and

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**Interpretation:** The court interpreted Section 5(7) to include assignees of financial debts,

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**Application:** The court applied the ratio to the facts by finding that the debt owed by Shree

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## Parties

- **Judges:** V. P. S…; Jinan…
- **Appellants:** Edelweiss Asset…
- **Respondents:** Shree Coke…; Shree Coke Mfg.…

## Timeline

- **2011-12-15 — Loan San…**: Bank of India sanctioned cash credit of Rs. 5 crore and letter of credit of Rs. 20 crore…
- **2013-03-31 — Default o…**: Shree Coke Manufacturing Co. Pvt.…

## 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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