# In the matter of Champalalji Finance Private Limited CP (IB) No.541-MB-IV-2021

> NCLT judgment dated 2023-03-17. Citation: TCN-2023-NCLT-04182. This case involves an application filed by Edelweiss Asset Reconstruction Company Limited, the…

- **Court:** NCLT
- **Order date:** 17 Mar 2023
- **Citation:** TCN-2023-NCLT-04182
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/champalalji-finance-private-limited-cp-ib-no541-mb-iv-2021-729de381

## Summary

### Background

This case involves an application filed by Edelweiss Asset Reconstruction Company Limited, the Financial Creditor, under Section 7 of the Insolvency & Bankruptcy Code, 2016, against Champalalji Finance Private Limited, the Corporate Debtor, for initiating the Corporate Insolvency Resolution Process (CIRP). The Financial Creditor claimed a total default amount of Rs. 1,06,28,22,398/-. The Corporate Debtor issued Secured Redeemable Non-Convertible Debentures in 2016 and defaulted on repayment of coupon payments and redemption of debentures. An Assignment Agreement was executed by ECL Finance Limited in favor of the Applicant for assignment of debt with respect to the Debentures.

## Facts

Edelweiss Asset Reconstruction Company Limited filed an application under Section 7 of the Insolvency & Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Champalalji Finance Private Limited. The Financial Creditor claimed a default amount of Rs. 1,06,28,22,398/-. The Corporate Debtor issued 6300 Secured Redeemable Non-Convertible Debentures in 2016, each with a face value of Rs. 1,00,000, totaling Rs. 63,00,00,000/-. A Trustee Agreement was executed on 01.07.2016, appointing IDBI Trusteeship Limited as the Debenture Trustee. The Debenture Trustee issued a Recall Notice on 28.02.2020, claiming Rs. 83,44,69,053/-. The Corporate Debtor defaulted on coupon payments and redemption of debentures, with the date of default being

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## Issues and analysis

### Issue 1: Whether the application filed by Edelweiss Asset Reconstruction Company Limited under Section 7 of …

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

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**Reasoning:** The NCLT found that the application was complete, filed within the limitation period, and

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

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

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## Parties

- **Judges:** Prabhat…; KISHORE VEMULAPALL…
- **Appellants:** Edelweiss Asset…
- **Respondents:** Champalalji…

## Timeline

- **2016-01-01 — Issuance of De…**: The Corporate Debtor issued 6300 Secured…
- **2016-07-01 — Trustee Agr…**: Trustee Agreement executed appointing IDBI…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5 — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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