# In the matter of Sunitti Papers Private Limited C.P. (IB) No. 1503-KB-2018

> NCLT judgment dated 2019-11-06. Citation: TCN-2019-NCLT-00691. Phoenix ARC Private Limited, acting as a financial creditor, filed an application under Section…

- **Court:** NCLT
- **Order date:** 6 Nov 2019
- **Citation:** TCN-2019-NCLT-00691
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/sunitti-papers-private-limited-cp-ib-no-1503-kb-2018-b5746251

## Summary

### Background

Phoenix ARC Private Limited, acting as a financial creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against M/s. Sunitti Papers Private Limited, the corporate debtor. The application was based on the corporate debtor's default in repaying a loan of Rs. 7,48,18,000.00 sanctioned by the financial creditor on February 14, 2013. The corporate debtor was declared NPA on October 31, 2013. The financial creditor claimed that the corporate debtor had admitted its liability in a letter dated June 15, 2016, acknowledging a sum of Rs. 7,95,00,923.67 as on November 4, 2015.

## Facts

Phoenix ARC Private Limited, a financial creditor, sanctioned a loan of Rs. 7,48,18,000.00 to M/s. Sunitti Papers Private Limited, the corporate debtor, on February 14, 2013. The loan was disbursed under various heads. The corporate debtor defaulted on the repayment of the loan and was declared a Non-Performing Asset (NPA) on October 31, 2013. To secure the debt, the corporate debtor created mortgages and securities. The corporate debtor also owed certain sums to Allahabad Bank, which were later taken over by the financial creditor via an Assignment Deed dated December 30, 2015. The corporate debtor entered into a settlement of debt with the financial creditor, whereby the assigned debt was Rs. 7,95,00,923.67 with further interest @ 12.70% p.a. as on November 4, 2015.

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor under Section 7 of the Insolvency and …

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

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**Reasoning:** The court perused the records and documents filed by both parties and found that the

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**Interpretation:** The completeness of the application under Section 7 is a prerequisite for

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**Application:** The court found that the application filed by Phoenix ARC was complete,

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## Parties

- **Judges:** Jinan…; Harish Chander…
- **Appellants:** Phoenix Arc…
- **Respondents:** M/S SUNITTI…

## Timeline

- **2013-02-14 — Loan Sanc…**: Financial Creditor sanctioned a loan of Rs.…
- **2013-10-31 — Account Decla…**: The Corporate Debtor's account was…

## 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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