# In the matter of Cengres Tiles Limited CP(IB)-39-NCLT-AHM-2021

> NCLT judgment dated 2022-04-27. Citation: TCN-2022-NCLT-03021. Axis Bank Limited, the Financial Creditor, filed a Company Petition under Section 7 of the…

- **Court:** NCLT
- **Order date:** 27 Apr 2022
- **Citation:** TCN-2022-NCLT-03021
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/cengres-tiles-limited-cpib-39-nclt-ahm-2021-72641b9e

## Summary

### Background

Axis Bank Limited, the Financial Creditor, filed a Company Petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) against Cengres Tiles Limited, the Corporate Debtor, for initiating the Corporate Insolvency Resolution Process (CIRP). The petition was based on the Corporate Debtor's default in paying a financial debt of Rs. 19,07,49,223/-. The Corporate Debtor had approached the Financial Creditor for financial assistance, and the Financial Creditor had sanctioned loan facilities of Rupees 20.00 Crores. The Corporate Debtor argued that there was no default as the total loan/credit facilities granted were Rs. 20.00 Crores, and SBI, the lead bank of the consortium, had already taken possession of the Corporate Debtor's properties. The Corporate Debtor

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## Facts

Axis Bank Limited, the Financial Creditor, filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Cengres Tiles Limited, the Corporate Debtor. The basis for the petition was the Corporate Debtor's alleged default in paying a financial debt of Rs. 19,07,49,223/-. The Corporate Debtor had initially approached Axis Bank for financial assistance, resulting in sanctioned loan facilities of Rs. 20.00 Crores. The date of default was stated to be 11.12.2019. The loan was part of a consortium with State Bank of India (SBI). A Joint Deed of Hypothecation was signed to secure the credit facilities. The Corporate Debtor also provided personal guarantees from several individuals. The Financial Creditor issued a recall notice on 17.06.2020 for Rs.

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## Issues and analysis

### Issue 1: Whether the Financial Creditor is entitled to file the present application against the Corporate …

**Ratio:** Section 7(1) of the IBC, 2016, allows a financial creditor, either by itself or jointly,

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**Reasoning:** The NCLT reasoned that even though SBI was the lead bank under the consortium, the

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**Interpretation:** The interpretation of Section 7(1) of the IBC, 2016, allows any financial

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**Application:** The NCLT applied this principle to the facts, noting that Axis Bank, as a

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## Parties

- **Judges:** Madan B.…; KAUSHALENDRA…
- **Appellants:** Axis Ban…
- **Respondents:** Cengres Tiles…; Cengres Til…

## Timeline

- **2014-03-10 — Sanction Lett…**: Credit facilities sanctioned as per the…
- **2014-03-28 — Joint Deed of…**: Corporate Debtor signed a Joint Deed of…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 3 — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-3)

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