# In the matter of ACIL Ltd. CP No. (IB)-170-(PB)-2018

> NCLT judgment dated 2018-08-08. Citation: TCN-2018-NCLT-00975. IDBI Bank Limited, claiming to be a financial creditor, filed an application under Section 7 of…

- **Court:** NCLT
- **Order date:** 8 Aug 2018
- **Citation:** TCN-2018-NCLT-00975
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/acil-ltd-cp-no-ib-170-pb-2018-71d12350

## Summary

### Background

IDBI Bank Limited, claiming to be a financial creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against ACIL Limited, the corporate debtor. The application was filed due to the corporate debtor's failure to repay outstanding dues. The applicant bank had sanctioned and disbursed loan amounts to the corporate debtor, and the corporate debtor had availed these facilities. However, the respondent failed to maintain financial discipline and repay the dues, leading to its account being classified as a Non-Performing Asset (NPA) on 15.03.2016.

## Facts

IDBI Bank Limited, the financial creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against ACIL Limited, the corporate debtor. ACIL Limited was incorporated on 15.04.1997. IDBI Bank sanctioned a term loan of Rs. 254 crore on 27.03.2012. The applicant and the respondent executed a Loan Agreement dated 29.03.2012. The respondent company utilized the entire amount of Rs. 254 crores. The Respondent requested for fresh/renewal of credit facilities. The Lenders agreed to provide fresh corporate loans and further to continue/renew the Existing Term Loans and Existing Working Capital. The Petitioner was designated as the Lead Bank. The Framework Agreement for Corrective Action

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## Issues and analysis

### Issue 1: Whether the application filed by IDBI Bank Limited under Section 7 of the Insolvency and Bankruptcy …

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

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**Reasoning:** The tribunal considered the evidence presented by the applicant bank, including loan

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

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**Application:** The tribunal applied Section 7 to the facts of the case and found that the

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## Parties

- **Judges:** CHIEF JUSTICE…; S. K. MOH…
- **Appellants:** M/s IDBI Bank…
- **Respondents:** ACIL LI…

## Timeline

- **1997-04-15 — Incorporation of ACIL…**: ACIL Limited was…
- **2012-03-27 — Sanction of T…**: IDBI Bank sanctioned a term loan…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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