# In the matter of Uttoron Engineering Private Limited CP(IB)No. 232-KB-2019

> NCLT judgment dated 2019-10-03. Citation: TCN-2019-NCLT-01101. Bank of India, the Financial Creditor, filed an application under Section 7 of the Insolvency…

- **Court:** NCLT
- **Order date:** 3 Oct 2019
- **Citation:** TCN-2019-NCLT-01101
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/uttoron-engineering-private-limited-cpibno-232-kb-2019-00b46e0c

## Summary

### Background

Bank of India, the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against M/s Uttoron Engineering Pvt. Ltd., the Corporate Debtor, to initiate the Corporate Insolvency Resolution Process (CIRP). The Corporate Debtor allegedly defaulted in paying a financial debt of Rs. 8,80,38,353/-. The Corporate Debtor's loan account was classified as a Non-Performing Asset (NPA) on 30.09.2018, prompting the Financial Creditor to file the application for CIRP initiation.

## Facts

Bank of India (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s Uttoron Engineering Pvt. Ltd. (Corporate Debtor). The Corporate Debtor allegedly defaulted on a financial debt of Rs. 8,80,38,353/-. The Financial Creditor had granted and disbursed Rs. 2,40,00,000/- to the Corporate Debtor as a term loan and cash credit facilities via a loan sanction letter dated 29.10.2010. The repayment term was extended multiple times, lastly on 10.03.2016. On 04.12.2017, the Financial Creditor revised the loan, raising credit facilities to Rs. 9,51,00,000/-. The Corporate Debtor's account was classified as a Non-Performing Asset (NPA) on 30.09.2018. The Corporate

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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 found that the Financial Creditor had established that the Corporate Debtor had

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**Interpretation:** Section 7 provides a mechanism for financial creditors to recover their dues

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

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## Parties

- **Judges:** Madan B.…; Virendra Kumar…
- **Appellants:** Bank of…
- **Respondents:** M/s Uttoron…
- **Advocates:** Anindit…; Debashis Chakrabor…; +3 more

## Timeline

- **2010-10-29 — Loan Sanction…**: Financial Creditor granted and disbursed Rs.…
- **2012-08-25 — Repayment Term…**: Repayment term of the…

## 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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