# In the matter of Ashoka Designs LLP

> NCLT judgment dated 2023-11-29. Citation: TCN-2023-NCLT-00521. Ashoka Designs LLP filed an application under Section 10 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 29 Nov 2023
- **Citation:** TCN-2023-NCLT-00521
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/ashoka-designs-llp-e8a92dea

## Summary

### Background

Ashoka Designs LLP filed an application under Section 10 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of the Corporate Insolvency Resolution Process (CIRP). The company faced financial distress due to the COVID-19 pandemic, leading to its inability to pay debts to financial and operational creditors. The company defaulted on payments to Financial Creditors amounting to Rs. 3,66,80,026/- and to Operational Creditors amounting to Rs. 4,44,68,484/-. Defaults began in December 2022.

## Facts

Ashoka Designs LLP, a company engaged in the trading of textile fabrics, faced severe financial stress due to the COVID-19 pandemic. This led to defaults in payments to both financial and operational creditors. The company owed Rs. 3,66,80,026/- to financial creditors and Rs. 4,44,68,484/- to operational creditors. Defaults commenced in December 2022. The company's financial statements revealed ongoing losses and a significant portion of its turnover locked up in inventories and trade receivables. A large part of the inventory was outdated, making it difficult to recover. The company had obtained loans from Union Bank of India, Axis Bank, HDFC Bank, and YES Bank, along with unsecured loans from private financial creditors. Financial creditors had initiated recovery

…

## Issues and analysis

### Issue 1: Whether the application filed by Ashoka Designs LLP under Section 10 of the Insolvency and …

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

…

**Reasoning:** The NCLT found that Ashoka Designs LLP had defaulted on payments to both financial and

…

**Interpretation:** Section 10 of the IBC provides a mechanism for a corporate debtor to initiate

…

**Application:** The NCLT applied Section 10 of the IBC to the facts of the case, finding that

…

## Parties

- **Judges:** BIDISHA BA…; ARVIND DEVA…
- **Respondents:** Ashoka Desi…

## Timeline

- **2022-12-01 — Default in P…**: Corporate Debtor started defaulting payments…
- **2023-07-15 — Unaudited Financial…**: Unaudited financial statement of assets and liabilities as on 15/07/2023 attached to…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/ashoka-designs-llp-e8a92dea