# In the matter of Athena Demwe Power Ltd. CP (IB) No. 244-(ND)-2017

> NCLT judgment dated 2017-09-28. Citation: TCN-2017-NCLT-00342. Indian Bank filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 28 Sept 2017
- **Citation:** TCN-2017-NCLT-00342
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/athena-demwe-power-ltd-cp-ib-no-244-nd-2017-7875ee94

## Summary

### Background

Indian Bank filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against M/s Athena Demwe Power Ltd., the Corporate Debtor, for initiating the Corporate Insolvency Resolution Process (CIRP). The Corporate Debtor, an SPV, had approached the bank for financial assistance to set up a power-generating project in the North East. The project faced delays due to various reasons, including litigation, government approvals, and economic slowdown, leading to the Corporate Debtor's failure to regularize its account, which was declared a Non-Performing Asset (NPA).

## Facts

Indian Bank, the Financial Creditor, filed a petition under Section 7 of the IBC against M/s Athena Demwe Power Ltd., the Corporate Debtor. The Corporate Debtor, an SPV, sought financial assistance from the bank for a power-generating project in the North East. The bank sanctioned a short-term loan of Rs. 200 crores in 2011, followed by a sub-limit of Rs. 100 crores. The repayment schedule was restructured multiple times. The Corporate Debtor failed to regularize the account, leading to its classification as an NPA on 2013-05-31. As of the statement of account, Rs. 333.80 crores was due and payable. The Corporate Debtor cited delays due to litigation, government approvals, and economic slowdown as reasons for the project's stagnation. The Corporate Debtor also argued

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## Issues and analysis

### Issue 1: Whether the petition filed by the Financial Creditor under Section 7 of the Insolvency and …

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

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**Reasoning:** The court found that the Corporate Debtor had defaulted on its payment obligations to the

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**Interpretation:** Section 7 provides a mechanism for financial creditors to recover their dues

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**Application:** The court applied Section 7 to the facts of the case, finding that the

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## Parties

- **Judges:** Ina Mal…; SH. S.K MOH…
- **Appellants:** Indian…
- **Respondents:** M/s. Athena Demwe…

## Timeline

- **2011-01-01 — Loan Sanc…**: Financial creditor sanctioned and disbursed a Short Term Loan of 200 crores and a further…
- **2013-05-31 — Account Decla…**: Corporate Debtor's account was…

## 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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