# In the matter of AVISHKAR INNOVATIVE PRIVATE LIMITED

> NCLT judgment dated 2025-01-01. Citation: TCN-2025-NCLT-00696. This case involves an application filed by Canara Bank under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 1 Jan 2025
- **Citation:** TCN-2025-NCLT-00696
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/avishkar-innovative-private-limited-b9924f42

## Summary

### Background

This case involves an application filed by Canara Bank under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Avishkar Innovative Pvt Ltd due to a default of Rs. 60,92,98,736.11. The Corporate Debtor (CD) had availed credit facilities from the bank, leading to the default. The CD had also filed an application under Section 10 of the IBC, which was later withdrawn. The CD contested the Section 7 application, arguing that its Section 10 application should take precedence and citing COVID-19 related disruptions as the cause of default. The Adjudicating Authority considered the arguments and evidence presented by both parties, including the CD's admission of debt in its Section 10 application

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## Facts

Canara Bank extended credit facilities to Avishkar Innovative Pvt Ltd, with the directors authorized to take a loan of Rs. 30 crores as per the Board Resolution dated 2015-09-02. The Corporate Debtor (Avishkar) availed these facilities, leading to a default of Rs. 60,92,98,736.11 as of 2023-09-30. The date of default was given as 2022-08-26. Avishkar also filed an application under Section 10 of the IBC on 2023-08-19, seeking Corporate Insolvency Resolution Process (CIRP), which it later withdrew on 2024-04-23. Canara Bank initiated proceedings under the SARFAESI Act, 2002, on 2022-08-02 and filed Diary No.680/2023 before DRT-2 Bengaluru on 2023-03-16 for recovery of the outstanding amount. Avishkar submitted restructuring proposals, including an OTS offer, which

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 is maintainable …

**Ratio:** Section 238 of the IBC gives overriding effect to proceedings under Section 7, and the

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**Reasoning:** The Adjudicating Authority relied on the Hon'ble NCLAT's judgement in State Bank of India

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**Interpretation:** Section 238 of the IBC is interpreted to mean that the insolvency resolution

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**Application:** The ratio and reasoning apply to the present case because the Corporate

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## Parties

- **Judges:** K. Bi…; Manoj Kumar…
- **Appellants:** Canara…
- **Respondents:** AVISHKAR INNOVATIV…

## Timeline

- **2015-09-02 — Board Reso…**: Corporate Debtor's Board Resolution authorizing…
- **2022-08-02 — SARFAESI Act Pr…**: Canara Bank initiated proceedings…

## 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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