# In the matter of Nirmangold Plasttech Private Limited

> NCLT judgment dated 2024-06-05. Citation: TCN-2024-NCLT-01224. Abhyudaya Cooperative Bank Limited, the Financial Creditor (FC), filed a Company Petition (CP…

- **Court:** NCLT
- **Order date:** 5 Jun 2024
- **Citation:** TCN-2024-NCLT-01224
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/nirmangold-plasttech-private-limited-0d9f4cf6

## Summary

### Background

Abhyudaya Cooperative Bank Limited, the Financial Creditor (FC), filed a Company Petition (CP (IB) No. 382/MB/2022) under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Nirmangold Plasttech Private Limited, the Corporate Debtor (CD). The FC claimed a default of Rs. 14,03,75,530.25/- as of 31.07.2021, including principal, interest, and unapplied charges, stemming from loan and cash credit facilities sanctioned to the CD. The CD's account was classified as Non-Performing Asset (NPA) on 29.10.2019.

## Facts

Abhyudaya Cooperative Bank Limited (FC) filed a petition to initiate Corporate Insolvency Resolution Process (CIRP) against Nirmangold Plasttech Private Limited (CD) due to a default of Rs. 14,03,75,530.25/-. The default includes principal, interest, and unapplied charges on loan and cash credit facilities. The CD's account was classified as NPA on 29.10.2019. The FC provided credit facilities to the CD, secured by hypothecation deeds and other documents. The CD acknowledged the term loans and cash credit facility. The FC issued a Loan Recall cum Guarantee Invocation Notice dated 15.07.2021. The CD had not made any part-payment of the credit facilities between 2013 and 2021 and did not respond to the Loan Recall Notice. The FC produced a record of default from the

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## Issues and analysis

### Issue 1: Whether the Financial Creditor (FC) has successfully demonstrated the existence of debt, default, …

**Ratio:** Section 7 of the IBC requires the Adjudicating Authority to determine the debt,

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**Reasoning:** The NCLT examined the statement of account, loan recall notice, and MCA Master Data,

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**Interpretation:** Section 7 of the IBC focuses on the existence of a 'default' rather than the

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**Application:** The FC provided sufficient evidence to demonstrate that the CD owed more than

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## Parties

- **Judges:** K. R. SAJI…; SANJIV…
- **Respondents:** Nirmangold…
- **Advocates:** Madhur…; Yogesh M…; +1 more

## Timeline

- **2013-12-02 — Sanction…**: Term Loan of Rs. 8,43,48,000/- and Letter of Credit Limit worth Rs. 2,83,00,000/- was…
- **2016-06-03 — Sanction…**: Term Loan of Rs. 1,00,00,000/- and the Cash Credit Limit worth Rs. 3,00,00,000/- was…

## 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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