# In the matter of State Bank of India & Anr. Vs. Visa Infrastructure Ltd. CA(AT) (Insolvency) No. 179 of 2019

> NCLAT judgment dated 25 Sept 2019. Citation: TCN-2019-NCLAT-00247. The appeal was filed by the State Bank of India (Financial Creditor) against an order of…

- **Court:** NCLAT
- **Order date:** 25 Sept 2019
- **Citation:** TCN-2019-NCLAT-00247
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/state-bank-of-india-anr-vs-visa-infrastructure-ltd-ca-1fcab89f

## Summary

### Background

The appeal was filed by the State Bank of India (Financial Creditor) against an order of the Adjudicating Authority (NCLT, Kolkata Bench) which rejected its application under Section 7 of the Insolvency and Bankruptcy Code, 2016, for initiating Corporate Insolvency Resolution Process against Visa Infrastructure Ltd. (Corporate Debtor). The NCLT had rejected the application on the ground that the Corporate Debtor had discharged its obligation under the guarantee, and therefore, no debt was due.

## Facts

State Bank of India, the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 against Visa Infrastructure Ltd., the Corporate Debtor, for initiating Corporate Insolvency Resolution Process. The Adjudicating Authority (NCLT, Kolkata Bench) rejected this application on January 11, 2019, stating that the Corporate Debtor had discharged its guarantee obligations, and thus, no debt was due. The Financial Creditor appealed this order, arguing that the NCLT erred in equating asset valuation inflation with additional equity infusion and that the additional equity of Rs. 125 Crore should have been in cash or equity.

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor committed a default in making the payment of the amount mentioned in…

**Ratio:** The NCLAT did not reach a conclusive ratio on this issue due to the split verdict. The…

**Reasoning:** The NCLAT members were divided on whether the Corporate Debtor had discharged its…

**Interpretation:** The Judicial Member interpreted 'additional equity' broadly to include the…

**Application:** The Judicial Member applied the principle that the merger of VBL with VSL,…

## Parties

- **Judges:** Bansi Lal…
- **Advocates:** Ramji Srin…; PBA Srini…; +10 more

## Timeline

- **September 26, 2012 — CDR Appr…**: The Corporate Debt Restructuring Forum (CDR) empowered group approved the restructuring…
- **September 28, 2012 — Board Resoluti…**: Board Resolution passed by the Board of Directors of VSL, leading to lenders…

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