# In the matter of Simrut Foods and Hospitality Private Limited C.P. No.1973-I&BP-2018

> NCLT judgment dated 2018-09-03. Citation: TCN-2018-NCLT-00829. The case involves a Company Petition filed by The Yashwant Co-operative Bank Ltd. and The…

- **Court:** NCLT
- **Order date:** 3 Sept 2018
- **Citation:** TCN-2018-NCLT-00829
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/simrut-foods-and-hospitality-private-limited-cp-no1973-ibp-2018-6dca9089

## Summary

### Background

The case involves a Company Petition filed by The Yashwant Co-operative Bank Ltd. and The Chikhali Urban Cooperative Bank Ltd. jointly, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against Simrut Foods and Hospitality Private Limited, the Corporate Debtor. The Corporate Debtor allegedly defaulted on a payment of Rs. 1,86,84,115/- on 30.06.2017. The petition is filed under Section 7 of the Insolvency and Bankruptcy Code (IBC), read with Rule 4 of the Insolvency & Bankruptcy (AAA) Rules, 2016. The First Petitioner had sanctioned Rs. 50,00,000/- as Cash Credit Facility on 18.10.2014 and Rs. 50,00,000/- as Term Loan on 12.02.2015 to the Corporate Debtor. The Second Petitioner sanctioned Rs. 1,00,00,000/- as Term Loan on 18.10.2014 to the

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## Facts

The Yashwant Co-operative Bank Ltd. and The Chikhali Urban Cooperative Bank Ltd. jointly filed a petition to initiate Corporate Insolvency Resolution Process (CIRP) against Simrut Foods and Hospitality Private Limited, referred to as the Corporate Debtor. The Corporate Debtor allegedly defaulted on a payment of Rs. 1,86,84,115/- on 30.06.2017. The First Petitioner, The Yashwant Co-operative Bank Ltd., sanctioned Rs. 50,00,000/- as Cash Credit Facility on 18.10.2014 and Rs. 50,00,000/- as Term Loan on 12.02.2015 to the Corporate Debtor. The Second Petitioner, The Chikhali Urban Cooperative Bank Ltd., sanctioned Rs. 1,00,00,000/- as Term Loan on 18.10.2014 to the Corporate Debtor. On 20.10.2014, the Corporate Debtor, along with Mr. Nitin Chandrakant Naik, Mr. Nayan Vijay

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor committed a default …

**Ratio:** Section 7 of the Insolvency and Bankruptcy Code (IBC) allows a financial creditor to

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**Reasoning:** The Adjudicating Authority, upon reviewing the documents, found that the Corporate Debtor

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

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**Application:** The Corporate Debtor's failure to repay the loan, coupled with the admission of

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## Parties

- **Judges:** Bhaskara Pantula…; V. Nallasen…
- **Appellants:** The Yashwant…
- **Respondents:** SIMRUT FOODS &…; Simrut Foods and…

## Timeline

- **2014-10-18 — First Petitioner…**: The Yashwant Co-operative Bank Ltd. sanctioned Rs. 50,00,000/- as Cash Credit Facility to…
- **2015-02-12 — First Petitioner…**: The Yashwant Co-operative Bank Ltd. sanctioned Rs. 50,00,000/- as Term Loan to the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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