# In the matter of Supreme Tex Mart Limited CP (IB) No. 67-Chd-Pb-2017

> NCLT judgment dated 2017-09-29. Citation: TCN-2017-NCLT-00335. Allahabad Bank filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 29 Sept 2017
- **Citation:** TCN-2017-NCLT-00335
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/supreme-tex-mart-limited-cp-ib-no-67-chd-pb-2017-73e91c2e

## Summary

### Background

Allahabad Bank filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against M/s. Supreme Tex Mart Limited, a corporate debtor, due to default in repayment of a term loan and a Funded Interest Term Loan (FITL). The bank sought initiation of the insolvency resolution process. The corporate debtor was incorporated on 25.10.1988. The bank had issued a notice under Section 13(2) of the SARFAESI Act, 2002, and had also filed an Original Application before the Debt Recovery Tribunal (DRT), Chandigarh. The corporate debtor acknowledged the debt and submitted a One Time Settlement (OTS) proposal, which was rejected by the bank.

## Facts

Allahabad Bank, the financial creditor, filed a petition against M/s. Supreme Tex Mart Limited, the corporate debtor, under Section 7 of the Insolvency and Bankruptcy Code, 2016. The corporate debtor had availed of a term loan of ₹14,13,00,000/- and a Funded Interest Term Loan (FITL) of ₹3,00,00,000/-, totaling ₹17,13,00,000/-, in 2015. The account of the corporate debtor became irregular and was declared a Non-Performing Asset (NPA). The bank issued a notice under Section 13(2) of the SARFAESI Act, 2002. The total amount in default was ₹20,76,27,328/- as on 31.07.2017, including interest and expenses. The corporate debtor acknowledged the debt and submitted a One Time Settlement (OTS) proposal, which was rejected by the bank. The bank has complied with all the

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## Issues and analysis

### Issue 1: Whether the petitioner bank is a 'Financial Creditor' …

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

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**Reasoning:** The court found no dispute that the petitioner bank is a 'Financial Creditor' and that a

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**Interpretation:** The term 'Financial Creditor' is interpreted broadly to include entities that

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**Application:** In this case, Allahabad Bank, having extended loans to Supreme Tex Mart

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## Parties

- **Judges:** R.P.Nag…
- **Appellants:** Allahabad…
- **Respondents:** M/s Supreme Tex…
- **Advocates:** Nakul S…

## Timeline

- **2014-01-31 — Power of At…**: Allahabad Bank executed Power of Attorney in…
- **2015-03-30 — Loan San…**: Term loan and Funded Interest Term Loan…

## 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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