# In the matter of Care IT Solutions Private Limited CP-1056-(IB)-2018

> NCLT judgment dated 2018-10-17. Citation: TCN-2018-NCLT-00539. The case involves an application under Section 7 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 17 Oct 2018
- **Citation:** TCN-2018-NCLT-00539
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/care-it-solutions-private-limited-cp-1056-ib-2018-1a325feb

## Summary

### Background

The case involves an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, filed by Federal Bank Limited, the Financial Creditor, against Care IT Solutions Private Limited, the Corporate Debtor. The Corporate Debtor is a private limited company incorporated under the Companies Act, 1956. The Financial Creditor claimed a default amount of ₹29,33,21,632.64 as on 11.07.2018, along with subsequent interest. The Applicant Bank had initially sanctioned various credit facilities to the Corporate Debtor amounting to ₹1705 Lakhs vide Sanction Letter dated 03.10.2015, which were later reviewed and enhanced. The Corporate Debtor's loan accounts were classified

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## Facts

The Corporate Debtor, Care IT Solutions Private Limited, is a private limited company incorporated on 07.03.2003. The Financial Creditor, Federal Bank Limited, claimed a default amount of ₹29,33,21,632.64 as on 11.07.2018, along with subsequent interest. The Applicant Bank had initially sanctioned various credit facilities to the Corporate Debtor amounting to ₹1705 Lakhs vide Sanction Letter dated 03.10.2015, which were later reviewed and enhanced. The Corporate Debtor's loan accounts were classified as Non-Performing Asset with effect from 07.10.2017. A recall cum demand notice dated 08.01.2018 was sent to the Corporate Debtor demanding repayment of ₹26,64,73,578, but the Corporate Debtor failed to repay. The Applicant Bank initiated recovery action under SARFAESI Act

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor under Section 7 of the IBC, 2016 is …

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

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**Reasoning:** The Tribunal observed that the petitioner (Financial Creditor) had established clearly

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**Interpretation:** Section 7 of the IBC, 2016 provides the mechanism for a financial creditor to

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**Application:** The Financial Creditor, Federal Bank Limited, filed an application under

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## Parties

- **Judges:** B.S.V. Prakash…; S. VIJAYARA…
- **Appellants:** M/s. FEDERAL BANK…
- **Respondents:** M/s. CARE IT…
- **Advocates:** S. Sathiyanarayana…; D.Pavi…

## Timeline

- **2003-03-07 — Incorporation of…**: Care IT Solutions Private Limited…
- **2015-10-03 — Sanction…**: Applicant Bank sanctioned credit facilities…

## 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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