# In the matter of Texas Tiles & Industries Limited C.P. (IB) No. 1385-KB-2018

> NCLT judgment dated 2019-06-19. Citation: TCN-2019-NCLT-02842. Dena Bank filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 19 Jun 2019
- **Citation:** TCN-2019-NCLT-02842
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/texas-tiles-industries-limited-cp-ib-no-1385-kb-2018-14631898

## Summary

### Background

Dena Bank filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, against M/s. Texas Textiles & Industries Limited, the Corporate Debtor, for initiating the Corporate Insolvency Resolution Process (CIRP). The application was based on the Corporate Debtor's failure to repay a debt of Rs. 17,82,71,483.79. Notices were issued to the Corporate Debtor, but they did not appear despite repeated calls, leading to the matter being heard ex-parte.

## Facts

Dena Bank, the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against M/s. Texas Textiles & Industries Limited, the Corporate Debtor. The Corporate Debtor had borrowed a sum of Rs. 10,98,32,983.79 from the Financial Creditor. In addition to this, a sum of Rs. 6,82,46,000/- was due as accrued interest, and Rs. 1,92,500/- was due towards other miscellaneous expenses. The total amount due to the Financial Creditor from the Corporate Debtor was Rs. 17,82,71,483.79. The Corporate Debtor defaulted in making the installment of the amount due. A demand notice was sent through the Advocate on 15th September 2018, but the Corporate Debtor failed to make the payment or even respond to the legal notice. The Financial

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## Issues and analysis

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

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

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**Reasoning:** The court was convinced that the amount stated in the application was due and the default

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

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

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## Parties

- **Judges:** Jinan…; Harish Chander…
- **Appellants:** Dena…
- **Respondents:** Texas Textile &…
- **Advocates:** Gopal P…; Mandeep…

## Timeline

- **2014-01-11 — Revised Sancti…**: Revised sanction letter…
- **2018-09-15 — Demand N…**: Demand notice issued by the Financial…

## 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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