# In the matter of Swarnsparsh Gems & Jewellery Limited C.P. No.1118-I&BP-2019

> NCLT judgment dated 2019-10-22. Citation: TCN-2019-NCLT-00869. Bank of India filed a Company Petition against Suwarnsparsh Gems and Jewellery Ltd. under…

- **Court:** NCLT
- **Order date:** 22 Oct 2019
- **Citation:** TCN-2019-NCLT-00869
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/swarnsparsh-gems-jewellery-limited-cp-no1118-ibp-2019-0b26f562

## Summary

### Background

Bank of India filed a Company Petition against Suwarnsparsh Gems and Jewellery Ltd. under Section 7 of the Insolvency and Bankruptcy Code, 2016, alleging a default in payment of Rs. 17,18,85,788.17. The petition seeks to initiate the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor.

## Facts

Bank of India filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Suwarnsparsh Gems and Jewellery Ltd. The bank claimed that the Corporate Debtor defaulted on payments amounting to Rs. 17,18,85,788.17. The bank provided evidence including sanction letters for credit facilities granted to the Corporate Debtor, totaling Rs. 14.22 Crores, comprising cash credit and term loans. The Corporate Debtor's account was classified as a Non-Performing Asset (NPA) on 30.06.2017. The bank also issued a notice under Section 13(2) of the SARFAESI Act, 2002, demanding Rs. 16,35,78,781/- as on 30.06.2017. The Corporate Debtor's counsel withdrew representation due to lack of cooperation. The Adjudicating Authority admitted the petition, finding the

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor defaulted in repaying the loans availed from the Petitioner, Bank of …

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

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**Reasoning:** The Adjudicating Authority, upon reviewing the documents filed by the Creditor, found

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**Interpretation:** Section 7 provides a mechanism for creditors to recover their dues from

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**Application:** In this case, the Corporate Debtor's failure to repay the loans, as evidenced

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## Parties

- **Judges:** Bhaskara Pantula…; Shyam Babu…
- **Appellants:** Bank of…
- **Respondents:** Suwarnsparsh Gems…

## Timeline

- **2013-07-01 — Sanction Lett…**: One of the sanction letters…
- **2013-11-27 — Sanction Lett…**: One of the sanction letters…

## 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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