# In the matter of Mona Gases Private Limited

> NCLT judgment dated 2024-06-25. Citation: TCN-2024-NCLT-01121. The case involves an application under Section 7 of the Insolvency and Bankruptcy Code, 2016…

- **Court:** NCLT
- **Order date:** 25 Jun 2024
- **Citation:** TCN-2024-NCLT-01121
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/mona-gases-private-limited-5d401d92

## Summary

### Background

The case involves an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) by Edelweiss Asset Reconstruction Company Limited (Financial Creditor) to initiate Corporate Insolvency Resolution Process (CIRP) against Mona Gases Private Limited (Corporate Debtor). The Corporate Debtor is a private limited company incorporated on 17.05.2004. Central Bank of India (CBI) had sanctioned credit facilities to the Corporate Debtor vide sanction letter dated 04.01.2005, granting a Term Loan -LAP to the tune of Rs.1,73,99,999/- to Corporate Debtor. The Corporate Debtor committed default in repayment of the same and as such the account was classified as NPA on 01.10.2006. The said account with all its rights title and interest was assigned to Edelweiss Asset

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## Facts

Central Bank of India (CBI) sanctioned credit facilities to Mona Gases Private Limited (Corporate Debtor) on 04.01.2005, granting a term loan of Rs. 1,73,99,999. The Corporate Debtor defaulted on repayments, leading to the account being classified as NPA on 01.10.2006. The debt was assigned to Edelweiss Asset Reconstruction Company Limited (Financial Creditor) on 28.03.2014. A negotiated settlement on 17.04.2015 failed and was revoked on 26.05.2016. As of 21.04.2023, the total amount due was Rs. 5,66,33,785. The Corporate Debtor's balance sheets acknowledge the debt. The application under Section 7 of IBC was filed by the Financial Creditor, seeking to initiate CIRP. The Corporate Debtor failed to appear despite service of notice.

## Issues and analysis

### Issue 1: Whether the Corporate Debtor …

**Ratio:** A default occurs when a debt is not paid when due. Evidence of default can be established

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**Reasoning:** The Adjudicating Authority relied on the loan sanction agreement, the Corporate Debtor's

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**Interpretation:** The term 'default' under the IBC refers to the non-payment of debt when it

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**Application:** The Corporate Debtor's account being classified as NPA on 01.10.2006, along

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## Parties

- **Judges:** BIDISHA BA…; Balraj…
- **Respondents:** Mona Gases…

## Timeline

- **2004-05-17 — Incorporation of…**: Mona Gases Private Limited…
- **2005-01-04 — Sanction of Credit…**: Central Bank of India sanctioned credit…

## 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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