# In the matter of Siddharth World Trade Private Limited CP (IB) 4289-MB-2018

> NCLT judgment dated 2021-05-13. Citation: TCN-2021-NCLT-02153. The case involves a petition filed under Section 7 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 13 May 2021
- **Citation:** TCN-2021-NCLT-02153
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/siddharth-world-trade-private-limited-cp-ib-4289-mb-2018-0998221c

## Summary

### Background

The case involves a petition filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, by Edelweiss Asset Reconstruction Company Limited against M/s Siddharth World Trade Private Limited, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) due to default in payment of a financial debt. The Bank of India, the original lender, assigned the debt to Edelweiss. The corporate debtor failed to make payments, leading to the account being classified as NPA. The petitioner claims a total outstanding amount of Rs. 92,01,03,572 as of 31.10.2018, with the date of default being 30.03.2012. The corporate debtor had availed credit facilities amounting to Rs. 36,00,00,000 from Bank of India, secured by various means including hypothecation agreements and

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## Facts

Edelweiss Asset Reconstruction Company Limited filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s Siddharth World Trade Private Limited, citing a default in payment of a financial debt. The total outstanding amount claimed was Rs. 92,01,03,572 as of 31.10.2018, with the initial date of default being 30.03.2012, and the account was classified as NPA on 30.06.2012. Bank of India had originally granted credit facilities to the corporate debtor amounting to Rs. 36,00,00,000, comprising a term loan of Rs. 26,00,00,000 and cash credit of Rs. 10,00,00,000. These facilities were secured by various agreements, including a hypothecation loan agreement, term loan consortium

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## Issues and analysis

### Issue 1: Whether the petition filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, is …

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

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**Reasoning:** The court noted that the petitioner, Edelweiss Asset Reconstruction Company Limited, had

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

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**Application:** The court applied Section 7 to the facts of the case, noting that the

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## Parties

- **Judges:** Harihar Prakash…; Ravikumar…; +1 more
- **Appellants:** Edelweiss Asset…
- **Respondents:** M/s Siddharth…

## Timeline

- **2008-03-08 — Incorporation of…**: M/s Siddharth World Trade Private Limited…
- **2009-11-03 — Sanction…**: Bank of India issued a Sanction Letter granting…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(8) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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