# In the matter of United Chloro Paraffins Private Ltd. CA(IB) No. 831-KB-2018 in CP(IB) No. 898-KB-2018

> NCLT judgment dated 2018-10-12. Citation: TCN-2018-NCLT-00591. The case pertains to an application filed by United Chloro Paraffins Private Ltd. under Section…

- **Court:** NCLT
- **Order date:** 12 Oct 2018
- **Citation:** TCN-2018-NCLT-00591
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/united-chloro-paraffins-private-ltd-caib-no-831-kb-2018-in-cpib-no-898-kb-2018-9f991620

## Summary

### Background

The case pertains to an application filed by United Chloro Paraffins Private Ltd. under Section 10 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP). The corporate debtor stated that it was unable to repay a debt of Rs. 29.78 crores to State Bank of India, the sole financial creditor. The corporate debtor had taken a loan of Rs. 67 lakhs in 2003 from State Bank of India, SME Branch, Howrah, at an interest rate of 12.60% p.a. They also availed a cash credit facility. They were repaying the loan regularly until 2015 when a market crisis and natural calamities caused their business to become standstill, resulting in significant losses and inability to repay the loan.

## Facts

United Chloro Paraffins Private Ltd. filed an application under Section 10 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) because they were unable to repay a debt of Rs. 29.78 crores to State Bank of India (SBI), their financial creditor. In 2003, the company had taken a loan of Rs. 67 lakhs from SBI at an interest rate of 12.60% p.a. and availed a cash credit facility. Until 2015, they were repaying the loan regularly. However, due to a market crisis and natural calamities in 2015, their business became standstill, resulting in significant losses. SBI supported the corporate debtor's application. Two operational creditors, M/s. Kutch Chemical Industries Ltd. and M/s. Panoli Intermediates (India) Pvt. Ltd., filed

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## Issues and analysis

### Issue 1: Whether the application filed by United Chloro Paraffins Private Ltd. under Section 10 of the …

**Ratio:** Section 10 of the Insolvency and Bankruptcy Code, 2016, allows a corporate applicant to

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**Reasoning:** The court found that the corporate debtor, United Chloro Paraffins Private Ltd., was

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**Interpretation:** Section 10 provides a mechanism for a corporate debtor to initiate CIRP when it

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**Application:** The court applied Section 10 to the facts of the case, noting that United

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## Parties

- **Judges:** Madan B.…
- **Respondents:** United Chloro…; United Chloro –…

## Timeline

- **2003-01-01 — Loan from State Bank of…**: United Chloro Paraffins Private Ltd. took a loan of Rs. 67 lakhs from State Bank of…
- **2015-01-01 — Business Sta…**: Due to market crisis and natural calamities, United Chloro Paraffins Private Ltd.'s…

## 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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