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

> NCLT judgment dated 2020-01-21. Citation: TCN-2020-NCLT-02248. 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-02248
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/adkure-technologies-private-limited-cp-ib-1201-mb-2020-f2ffbb34

## 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. The Corporate Debtor defaulted on the repayment of the loan, leading to the account being declared as a Non-Performing Asset (NPA). Disputes arose among the shareholders of the Corporate Debtor, hindering the commencement of commercial production. The Corporate Debtor also filed a petition under Section 10 of the Code for voluntary CIRP.

## Facts

Small Industries Development Bank of India (SIDBI) sanctioned a loan to Adkure Technologies Private Limited for setting up a pharmaceutical manufacturing plant. The total project cost was Rs. 19.63 crores. SIDBI sanctioned 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 Corporate Debtor could not commence commercial production by the originally scheduled date of 31.12.2017, and extensions were granted until 31.12.2019. The Corporate Debtor defaulted on the first installment of the principal amount due on

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor committed a default in repaying the loan availed from the Financial …

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

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**Reasoning:** The NCLT observed that the Corporate Debtor had failed to repay the loan amount as per

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**Interpretation:** The interpretation of Section 7 emphasizes the importance of establishing a

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**Application:** In this case, the Corporate Debtor's failure to repay the loan amount, the

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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 a loan to Adkure Technologies Private Limited for setting up a…
- **2017-02-17 — Loan Agreement…**: Loan Agreement was executed between SIDBI…

## 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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