# In the matter of Adkure Technologies Private Limited CP (IB) -1201-MB-2020

> NCLT judgment dated 2020-01-21. Citation: TCN-2020-NCLT-02249. Small Industries Development Bank of India (SIDBI) filed a petition under Section 7 of the…

- **Court:** NCLT
- **Order date:** 21 Jan 2020
- **Citation:** TCN-2020-NCLT-02249
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/adkure-technologies-private-limited-cp-ib-1201-mb-2020-75f7e63b

## Summary

### Background

Small Industries Development Bank of India (SIDBI) filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Adkure Technologies Private Limited, seeking initiation of the Corporate Insolvency Resolution Process (CIRP). SIDBI had sanctioned a loan to Adkure Technologies for setting up a pharmaceutical manufacturing plant under the "SIDBI Make in India Soft Loan Fund for Micro, Small and Medium Enterprises (SMILE) Scheme". Disputes arose among the shareholders of Adkure Technologies, leading to delays in the commencement of commercial production. Adkure Technologies defaulted on its loan repayment obligations, leading SIDBI to declare the account as a Non-Performing Asset (NPA) and initiate CIRP.

## Facts

Small Industries Development Bank of India (SIDBI) sanctioned a loan to Adkure Technologies Private Limited under the "SIDBI Make in India Soft Loan Fund for Micro, Small and Medium Enterprises (SMILE) Scheme" for setting up a pharmaceutical manufacturing plant. The total project cost was Rs. 19.63 crores, and SIDBI sanctioned a loan of Rs. 12 crores, including Rs. 11.80 crores as a term loan and Rs. 20 lakhs as a soft loan, on 13.10.2016. A Letter of Intent (LoI) was issued on 13.10.2016, and a Loan Agreement was executed on 17.02.2017. Securities in the form of mortgage, hypothecation, and personal guarantees were created in favor of SIDBI. The commercial production was originally scheduled for 31.12.2017, but was extended to 31.12.2019. Adkure Technologies

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor committed a default in respect of a financial debt owed to the …

**Ratio:** Section 7 of the Insolvency and Bankruptcy Code, 2016, becomes relevant when a financial

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**Reasoning:** The NCLT noted that the Corporate Debtor had admitted its dues to the financial creditor

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**Interpretation:** The explanation to Section 7(1) clarifies that a default is in respect of a

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**Application:** The Corporate Debtor admitted its dues to SIDBI, and the default was reflected

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## Parties

- **Judges:** SUCHITRAKAN…; Chandra Bha…
- **Appellants:** Small Industries…
- **Respondents:** Adkure Technologie…; Atul Um…

## Timeline

- **2016-10-13 — Loan Sanc…**: SIDBI sanctioned loan facility to Adkure Technologies Private Limited under the SMILE…
- **2017-02-17 — Loan Agre…**: Loan agreement executed between SIDBI and…

## 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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