# In the matter of Creative Looms And Crafts Private Limited

> NCLT judgment dated 2024-05-31. Citation: TCN-2024-NCLT-01266. Canara Bank (formerly E-Syndicate Bank) filed a petition under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 31 May 2024
- **Citation:** TCN-2024-NCLT-01266
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/creative-looms-and-crafts-private-limited-b707b462

## Summary

### Background

Canara Bank (formerly E-Syndicate Bank) filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Creative Looms and Crafts Private Limited, the Corporate Debtor. The petition was registered on 14.12.2022, based on the Corporate Debtor's default in payment of Rs. 10,87,07,393.65/-. The Corporate Debtor had submitted a loan application on 25.01.2015 for two loans: a Secured Overdraft Hypothecation Facility and a Term Loan. The Corporate Debtor defaulted on Loan-1 on 04.05.2017 and Loan-2 on 02.01.2017. Canara Bank issued a legal notice on 30.06.2017 under Section 13(2) of the SARFAESI Act. The Corporate Debtor submitted a restructuring proposal on 22.11.2021 and acknowledged its

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## Facts

Canara Bank (formerly E-Syndicate Bank) filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Creative Looms and Crafts Private Limited. The petition was registered on 14.12.2022. The Corporate Debtor defaulted on a total sum of Rs. 10,87,07,393.65/-, comprising a principal amount of Rs. 4,78,48,176 and an interest amount of Rs. 6,08,59,217.65. The default is related to two loans: Secured Overdraft Hypothecation Facility (Loan 1) and Term Loan (Loan 2). The Corporate Debtor defaulted on Loan-1 on 04.05.2017 and Loan-2 on 02.01.2017. Canara Bank issued a legal notice on 30.06.2017 under Section 13(2) of the SARFAESI Act. The Corporate Debtor submitted a restructuring proposal on

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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 4 of the Insolvency and Bankruptcy Code, 2016 stipulates that the minimum amount

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**Reasoning:** The Adjudicating Authority observed that the Corporate Debtor was indebted to the

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**Interpretation:** Section 7 of the IBC allows a financial creditor to initiate CIRP against a

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**Application:** The Corporate Debtor's outstanding debt exceeded Rs. 1,00,00,000, and the

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## Parties

- **Judges:** MANNI SANKARIAH…; Sanjeev R…
- **Respondents:** Creative Looms…

## Timeline

- **2015-01-25 — Loan Appli…**: Corporate Debtor submitted loan application to…
- **2017-01-02 — Default on…**: Corporate Debtor defaulted…

## Legal provisions

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

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