# in the matter of Utkram Chemicals Pvt. Ltd. CP(IB)No.454-KB-2018

> NCLT judgment dated 2018-12-04. Citation: TCN-2018-NCLT-00207. Indiabulls Housing Finance Limited, the Financial Creditor, filed an application under Section…

- **Court:** NCLT
- **Order date:** 4 Dec 2018
- **Citation:** TCN-2018-NCLT-00207
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/utkram-chemicals-pvt-ltd-cpibno454-kb-2018-adfd90a8

## Summary

### Background

Indiabulls Housing Finance Limited, the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Utkram Chemicals Private Limited, the Corporate Debtor, to initiate Corporate Insolvency Resolution Process (CIRP). The Corporate Debtor was unable to pay a sum of Rs. 2,53,49,917 towards a loan granted, including accrued interest. The Financial Creditor disbursed the loan in 2016, and the Corporate Debtor executed a loan agreement dated 2019-01-19, undertaking to repay the loan in installments, but failed to do so. The Corporate Debtor issued various ECS between 2016-09-06 and 2017-07-07 towards repayment, but all ECS bounced.

## Facts

Indiabulls Housing Finance Limited (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Utkram Chemicals Pvt. Ltd. (Corporate Debtor). The Corporate Debtor failed to repay a loan of Rs. 2,53,49,917, including interest, disbursed in 2016. A loan agreement was executed on 2019-01-19, with an undertaking to repay in installments, but no payments were made. ECS issued by the Corporate Debtor between 2016-09-06 and 2017-07-07 bounced. The Corporate Debtor did not file a reply to the application despite opportunities and remained absent during the hearing. The Financial Creditor provided a Loan Sanction Letter and agreement as evidence. The Financial Creditor

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## Issues and analysis

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

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

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**Reasoning:** The court considered the application filed by the Financial Creditor and the documents on

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

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**Application:** The Financial Creditor, Indiabulls Housing Finance Limited, filed the

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## Parties

- **Judges:** Madan B.…
- **Appellants:** Indiabulls…
- **Respondents:** Utkram Chemicals…
- **Advocates:** D.N. Mi…; Ayan Chat…; +1 more

## Timeline

- **2016-01-01 — Loan Disb…**: The Financial Creditor disbursed a…
- **2016-09-06 — ECS Issu…**: The Corporate Debtor issued various ECS…

## 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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