# In the matter of Coral Infragold Private Limited CP No. 170-9-JPR-2019

> NCLT judgment dated 2020-11-25. Citation: TCN-2020-NCLT-00206. AU Small Finance Bank Limited filed an application under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 25 Nov 2020
- **Citation:** TCN-2020-NCLT-00206
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/coral-infragold-private-limited-cp-no-170-9-jpr-2019-9e338213

## Summary

### Background

AU Small Finance Bank Limited filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) against Coral Infragold Private Limited, claiming to be a financial creditor. The application seeks initiation of the Corporate Insolvency Resolution Process (CIRP) due to default in repayment of a loan amount. The Respondent, Coral Infragold Private Limited, along with its directors as co-borrowers, had availed a revolving term loan facility of Rs. 4,25,00,000/- from the Applicant. The loan was secured by a Loan Agreement dated 08.06.2016, with a repayment schedule including a moratorium period. The Applicant claims that the Respondent defaulted in repayment, leading to the classification of the loan account as NPA. The Respondent contested the

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## Facts

AU Small Finance Bank Limited (the Applicant), claiming to be a financial creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) against Coral Infragold Private Limited (the Respondent/Corporate Debtor), seeking initiation of Corporate Insolvency Resolution Process (CIRP). The Respondent, along with its directors as co-borrowers, had availed a revolving term loan facility of Rs. 4,25,00,000/- vide Sanction Letter dated 27.05.2016. A Loan Agreement was executed on 08.06.2016 to secure the Term Loan, which was to be repaid within 42 months, including a moratorium on principal repayment for an initial period of 18 months, expiring on 05.12.2017. The moratorium was extended for 12 months via email dated 29.11.2017. The Respondent

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor defaulted in payment of the financial debt as per the provisions of …

**Ratio:** The ratio is based on the principle that if a corporate debtor commits a default of a

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**Reasoning:** The Adjudicating Authority relied on the Sanction Letter, Loan Agreement, Mortgage Deed,

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**Interpretation:** The interpretation of 'default' under the IBC is that it refers to the failure

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**Application:** The Adjudicating Authority applied the ratio to the facts of the case, noting

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## Parties

- **Judges:** P.S.N. P…; RAGHU N…; +1 more
- **Appellants:** AU Small Finance…
- **Respondents:** Coral Infragold…

## Timeline

- **2016-05-27 — Sanction Lett…**: Sanction letter for the revolving term loan…
- **2016-06-06 — First Disbu…**: A sum of Rs. 3,65,88,396/- was…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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