# In the matter of Alok Infrastructure Limited CP (IB) -2047-MB-2018

> NCLT judgment dated 2018-10-24. Citation: TCN-2018-NCLT-00514. Axis Bank Limited filed a petition against Alok Infrastructure Limited under Section 7 of the…

- **Court:** NCLT
- **Order date:** 24 Oct 2018
- **Citation:** TCN-2018-NCLT-00514
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/alok-infrastructure-limited-cp-ib-2047-mb-2018-13a7a3a4

## Summary

### Background

Axis Bank Limited filed a petition against Alok Infrastructure Limited under Section 7 of the Insolvency & Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP). The petition was based on the Corporate Debtor's default in making payment of Rs. 100,32,11,439/- as of 03.06.2018, including interest, with the date of default being 30.06.2016. The petitioner had sanctioned a Line of Credit Loan in the form of Overdraft Facility to the extent of Rs. 80 crores on 26.06.2015, with subsequent modifications to the terms and conditions. A line of credit agreement was entered into on 2nd July, 2015.

## Facts

Axis Bank Limited sanctioned a Line of Credit Loan in the form of Overdraft Facility to Alok Infrastructure Limited to the extent of Rs. 80 crores on 2015-06-26. Modifications were made to the terms and conditions of the overdraft facilities via sanction letters dated 2015-07-01 and 2015-07-06. A line of credit agreement was entered into on 2015-07-02. The Corporate Debtor defaulted in making payment of a sum of Rs. 100,32,11,439/- as on 2018-06-03, including interest, with the date of default being 2016-06-30. The Petitioner issued a notice dated 2018-02-02 demanding a sum of Rs.97,28,22,336/- including interest. State Bank of India had filed a petition against Alok Industries Ltd., the holding company of the Corporate Debtor, which was admitted by NCLT, Ahmedabad on

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## Issues and analysis

### Issue 1: Whether the initiation of CIRP against a subsidiary of a holding company, which is already …

**Ratio:** Section 14(1)(a) of the Code speaks about moratorium for prohibiting institution of suits

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**Reasoning:** The NCLT reasoned that Section 14(1)(a) pertains to actions against the corporate debtor

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**Interpretation:** Section 14(1)(a) is interpreted narrowly to apply only to the specific

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**Application:** In this case, the NCLT found that initiating CIRP against Alok Infrastructure

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## Parties

- **Judges:** Bhaskara Pantula…; V. Nallasen…
- **Appellants:** Axis Bank L…
- **Respondents:** Alok Infrastructur…

## Timeline

- **2015-06-26 — Line of Credit Loan…**: Axis Bank Limited sanctioned a Line of Credit Loan in the form of Overdraft Facility to…
- **2015-07-01 — Modification…**: Certain modifications were made to the terms and conditions of overdraft facilities vide…

## 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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