# In the matter of Chemstar Organics (India) Limited C.P. (IB) 1028-NCLT-MB-2022

> NCLT judgment dated 2022-12-06. Citation: TCN-2022-NCLT-00232. The case involves a petition filed by Omkara Assets Reconstruction Private Limited, the…

- **Court:** NCLT
- **Order date:** 6 Dec 2022
- **Citation:** TCN-2022-NCLT-00232
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/chemstar-organics-india-limited-cp-ib-1028-nclt-mb-2022-03d3d843

## Summary

### Background

The case involves a petition filed by Omkara Assets Reconstruction Private Limited, the Financial Creditor, under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Chemstar Organics (India) Limited, the Corporate Debtor. The Financial Creditor seeks resolution of a debt amounting to Rs. 11,87,21,370. The Corporate Debtor had been enjoying credit facilities from Gujarat Industrial Investment Corporation Limited (GIIC) since October 1997. GIIC had sanctioned and disbursed various credit facilities to the Corporate Debtor under a Loan Agreement dated 06.10.1997. GIIC later cancelled and recalled the sanction of a term loan facility. GIIC assigned the debt to the Applicant (Omkara Assets Reconstruction

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## Facts

Omkara Assets Reconstruction Private Limited (Financial Creditor) filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Chemstar Organics (India) Limited (Corporate Debtor) for a debt of Rs. 11,87,21,370. The Corporate Debtor had credit facilities from Gujarat Industrial Investment Corporation Limited (GIIC) since October 1997. GIIC sanctioned and disbursed credit facilities under a Loan Agreement dated 06.10.1997, but later cancelled and recalled a term loan facility. GIIC assigned the debt to Omkara Assets Reconstruction Private Limited under an Assignment Deed dated 14.08.2018. The Corporate Debtor defaulted on payments. GIIC approved a One Time Settlement (OTS) proposal under

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## Issues and analysis

### Issue 1: Whether the Financial Creditor has established the existence of a debt and default by the Corporate …

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

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**Reasoning:** The NCLT reviewed the documents submitted by the Financial Creditor, including the Deed

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**Interpretation:** The interpretation of Section 7 requires the Adjudicating Authority to

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**Application:** In this case, the Financial Creditor presented sufficient documentary evidence

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## Parties

- **Judges:** H.V. Subb…; ANURADHA SANJAY…
- **Appellants:** Omkara Assets…
- **Respondents:** Chemstar Organics…
- **Advocates:** Nikhil R…

## Timeline

- **1997-10-01 — Credit Facilities…**: Corporate Debtor enjoying credit facilities from Gujarat Industrial Investment…
- **1997-10-06 — Loan Agre…**: GIIC granted sanctioned and disbursed various credit facilities to Corporate Debtor under…

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