# In the matter of K V Aromatics Private Limited Company Petition (IB)-20(PB)-2021

> NCLT judgment dated 2022-03-15. Citation: TCN-2022-NCLT-03742. The case pertains to an application filed by ICICI Bank Limited under Section 7 of the…

- **Court:** NCLT
- **Order date:** 15 Mar 2022
- **Citation:** TCN-2022-NCLT-03742
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/k-v-aromatics-private-limited-company-petition-ib-20pb-2021-0b54a0e6

## Summary

### Background

The case pertains to an application filed by ICICI Bank Limited under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of the Corporate Insolvency Resolution Process (CIRP) against K. V. Aromatics Private Limited, the Corporate Debtor. ICICI Bank, the Financial Creditor, had sanctioned working capital and other financial facilities amounting to Rs 40 Crores to the Corporate Debtor. These facilities included Export Packing Credit Facility (EPC), Cash Credit Facility (CC), and Packaging Credit in Foreign Currency Facility (PCFC). The facilities were later amended/renewed/modified, reducing the working capital to Rs. 30 crores. The Corporate Debtor failed to repay the facility despite reminders, leading to the account being classified as a

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## Facts

ICICI Bank Limited sanctioned working capital and financial facilities of Rs 40 Crores to K. V. Aromatics Private Limited. These facilities included Export Packing Credit Facility (EPC), Cash Credit Facility (CC), and Packaging Credit in Foreign Currency Facility (PCFC). The facilities were amended/renewed/modified over time, eventually reducing the working capital to Rs. 30 crores. K. V. Aromatics Private Limited failed to repay the facilities, leading ICICI Bank to classify the account as a Non-Performing Asset (NPA) on 20.10.2019, in accordance with RBI guidelines. A recall notice was issued on 18.12.2019, demanding payment of Rs. 15,32,31,107/- as on 06.02.2020, including interest and other charges. Despite repeated notices, K. V. Aromatics Private Limited failed

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## Issues and analysis

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

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

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**Reasoning:** The court found that the application was complete and met the requirements of Rule 4(2)

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

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**Application:** The court applied Section 7 to the facts of the case, noting that ICICI Bank,

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## Parties

- **Judges:** Ramalingam…; HEMANT KUMAR…
- **Appellants:** ICICI Bank…
- **Respondents:** K. V. AROMATICS…

## Timeline

- **2013-08-13 — Credit Arrangement…**: Credit Arrangement Letter was…
- **2015-02-19 — Amendment/Renewal of…**: Facilities were…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14(1) — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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