# In the matter of Trust House Commerce Centre Private Limited CP No. 1264-IBC-NCLT-MB-MAH-2017

> NCLT judgment dated 2018-03-05. Citation: TCN-2018-NCLT-01756. The case involves an application under Section 7 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 5 Mar 2018
- **Citation:** TCN-2018-NCLT-01756
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/trust-house-commerce-centre-private-limited-cp-no-1264-ibc-nclt-mb-mah-2017-259801e9

## Summary

### Background

The case involves an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, by Abhyudaya Co-Operative Bank Limited (Financial Creditor) against M/s. Trust House Commerce Centre Private Limited (Corporate Debtor). The Financial Creditor claimed that the Corporate Debtor defaulted on a loan of ₹ 1,30,00,000/- sanctioned by the Citizens Co-Operative Bank Limited, which later merged with the Financial Creditor. The account was classified as NPA in 1999, and the Financial Creditor filed an application under Section 101 of the Maharashtra Co-Op. Societies Act, 1960, obtaining a recovery certificate. The total amount claimed in default was ₹ 6,47,13,403/- including interest as on 19.07.2017.

## Facts

On 10.08.1998, the Corporate Debtor requested the Citizens Co-Operative Bank Limited, Nana Peth Branch, Pune, for a loan of ₹ 1,30,00,000/-. The bank sanctioned the loan on 23.11.1998, secured by a simple mortgage. The account was classified as NPA on 23.12.1999. The Citizens Co-Operative Bank Limited, Pune, merged with the Financial Creditor on 03.07.2006. The erstwhile bank filed an application under Section 101 of the Maharashtra Co-Op. Societies Act, 1960, and obtained a recovery certificate on 24.12.2001. The Debtor issued a Promissory Note in favour of the erstwhile bank on 23.11.1998, for ₹ 1,30,00,000/-. The Debtor executed various deeds, including Deed of Hypothecation, Deed of Mortgage, and Agreement of Loan. The Financial Creditor claimed that the Debtor

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the …

**Ratio:** Section 7 of the IBC allows a financial creditor to initiate CIRP against a corporate

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**Reasoning:** The NCLT perused the petition and concluded that the application was complete under

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

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**Application:** The NCLT found that the Financial Creditor's application was complete and that

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## Parties

- **Judges:** M.K. Sh…; Bhaskara Pantula…
- **Appellants:** Abhyudaya…
- **Respondents:** M/s. Trust House…

## Timeline

- **1998-08-10 — Loan Req…**: The Corporate Debtor requested the Citizens Co-Operative Bank Limited for a loan of ₹…
- **1998-11-23 — Loan Sanc…**: The Citizens Co-Operative Bank Limited…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(8) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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