# In the matter of Shree Hari Cotex Pvt. Ltd. C.P (IB) No. 630-NCLT-AHM-2018

> NCLT judgment dated 2019-09-26. Citation: TCN-2019-NCLT-01223. Bank of Baroda filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 26 Sept 2019
- **Citation:** TCN-2019-NCLT-01223
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/shree-hari-cotex-pvt-ltd-cp-ib-no-630-nclt-ahm-2018-72fcecd8

## Summary

### Background

Bank of Baroda filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Shree Hari Cotex Private Limited, seeking initiation of the Corporate Insolvency Resolution Process (CIRP). The bank claimed that the corporate debtor had defaulted on financial assistance sanctioned to them. Notices were issued to the respondent, but no one appeared on their behalf, leading the Adjudicating Authority to proceed in their absence. The bank provided documents to support their claim, including sanction letters, agreements, and statements of accounts.

## Facts

Bank of Baroda sanctioned cash credit and term loan facilities to Shree Hari Cotex Private Limited. The corporate debtor defaulted on repayments, leading to the account being classified as a Non-Performing Asset (NPA) on 30.09.2014. As of 31.10.2018, an amount of Rs. 25,92,02,567/- was outstanding, including interest and penal interest. The corporate debtor acknowledged the debt and even transferred Rs. 17,00,000/- towards the outstanding loan. The bank filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of CIRP. The corporate debtor did not appear despite notices and paper publication.

## Issues and analysis

### Issue 1: Whether the applicant/financial creditor, Bank of Baroda, has established a financial debt and …

**Ratio:** Section 7 of the Insolvency and Bankruptcy Code, 2016, allows a financial creditor to

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**Reasoning:** The Adjudicating Authority reviewed the documents submitted by the bank, including

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**Interpretation:** Section 7 of the IBC provides a mechanism for financial creditors to recover

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**Application:** The bank provided sufficient evidence to prove the existence of a financial

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## Parties

- **Judges:** Manorama…; Chockalingam…
- **Appellants:** Bank of B…
- **Respondents:** Shree Hari Cotex…

## Timeline

- **2012-12-07 — Sanction…**: Bank of Baroda sanctioned cash credit hypothecation of stock-cum book debts of Rs.…
- **2014-06-30 — Default…**: Default occurred on…

## 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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