# 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-02844. 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-02844
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/texas-tiles-industries-limited-cp-ib-no-1385-kb-2018-a3b98734

## 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, seeking initiation of 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. The Corporate Debtor defaulted in making the instalment of amount due. Even on being sent a demand notice through their Advocate on 15th of September, 2018 demanding the amount due, which was duly served on the Corporate Debtor, they have failed to make the payment or even to respond to the legal notice.

## Facts

Dena Bank filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against M/s. Texas Textiles & Industries Limited. 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/- as accrued interest and another sum of Rs. 1,92,500/- towards other miscellaneous expenses was due. 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 instalment of amount due. A demand notice was sent on 15th of September, 2018, but the Corporate Debtor failed to make the payment or even respond to the legal notice. The Financial Creditor enclosed bank statements reflecting the amount withdrawn by

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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 satisfied that the amount was due to the Financial Creditor and a default

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

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**Application:** The court applied Section 7 to the facts, noting that the Corporate Debtor had

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## Parties

- **Judges:** Jinan…; Harish Chander…
- **Appellants:** Dena…
- **Respondents:** M/s. Texas…

## Timeline

- **2014-01-11 — Revised Sancti…**: Date of the revised sanction letter…
- **2014-03-07 — Execution of D…**: Date of execution of Power of Attorney…

## 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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