# In the matter of Appu Hotels Limited IBA-1459-2019

> NCLT judgment dated 2020-05-05. Citation: TCN-2020-NCLT-01384. The case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 5 May 2020
- **Citation:** TCN-2020-NCLT-01384
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/appu-hotels-limited-iba-1459-2019-03103e2a

## Summary

### Background

The case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, by Tourism Finance Corporation of India Limited ('Financial Creditor') against M/s. Appu Hotels Limited ('Corporate Debtor') to initiate the Corporate Insolvency Resolution Process (CIRP). The Financial Creditor claims that the Corporate Debtor has defaulted on its debt obligations. The application seeks to admit the application, initiate CIRP, declare a moratorium, and appoint an Interim Resolution Professional (IRP).

## Facts

Tourism Finance Corporation of India Limited (TFCI) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against M/s. Appu Hotels Limited, seeking to initiate the Corporate Insolvency Resolution Process (CIRP). TFCI claimed that Appu Hotels defaulted on loan repayments. Appu Hotels argued that it faced liquidity constraints and was attempting to sell assets to repay the debt. TFCI provided details of the financial debt, including sanction letters, board resolutions, loan agreements, and guarantees. The total outstanding amount was Rs.17,87,09,463/- plus interest, with default effective from 30.11.2019. Appu Hotels had availed term loans from TFCI and other banks, including Indian Bank, State Bank of India, IDBI Bank, and Bank of India. The

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## Issues and analysis

### Issue 1: Whether there is a debt and default on …

**Ratio:** The legal principle applied is that if there is a debt and default established under

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**Reasoning:** The court reasoned that the documents on record demonstrated the existence of a financial

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**Interpretation:** The interpretation of Section 7 of the IBC is that if a financial creditor

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**Application:** The court applied this principle to the facts of the case, noting that the

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## Parties

- **Judges:** R. VARADH…; Anil Ku…
- **Appellants:** Tourism Finance…
- **Respondents:** Appu Hotels…; M/s. Appu Hotels…
- **Advocates:** P.L. Nara…; Sam Jayaraj…

## Timeline

- **2009-08-19 — Sanction Letter and…**: Sanction Letter issued by the Financial Creditor to Corporate Debtor for term loan of…
- **2009-12-14 — Loan Agreement and Deed…**: Loan Agreement along with General…

## 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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