# In the matter of Cyclo Transmissions Limited CP (IB) -381i&BP-MB-2018

> NCLT judgment dated 2018-12-18. Citation: TCN-2018-NCLT-00051. IDBI Bank Limited filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 18 Dec 2018
- **Citation:** TCN-2018-NCLT-00051
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/cyclo-transmissions-limited-cp-ib-381ibp-mb-2018-61219c94

## Summary

### Background

IDBI Bank Limited filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking the initiation of the Corporate Insolvency Resolution Process (CIRP) against Cyclo Transmissions Limited, the Corporate Debtor, due to default in repayment of a loan amounting to Rs. 15,09,66,064/-. The petitioner had sanctioned fund-based and non-fund-based facilities to the Corporate Debtor, which were subsequently restructured and enhanced over time. The Corporate Debtor failed to meet its repayment obligations, leading to the petitioner recalling the loan and initiating CIRP.

## Facts

IDBI Bank Limited sanctioned fund-based and non-fund-based facilities to Cyclo Transmissions Limited. Initially, a fund-based limit of Rs. 2.5 crores and a non-fund-based limit of Rs. 1 crore were sanctioned on 2006-12-20, totaling Rs. 3.50 crores. The non-fund-based facility was later converted into a fund-based facility on 2007-03-20, bringing the total fund-based limit to Rs. 3.50 crores. On 2008-02-12, the fund-based limit was enhanced to Rs. 6 crores upon the Corporate Debtor's application. On 2009-04-11, the limits were renewed and restructured, revising the cash credit limit to Rs. 3.5 crores, a fresh working capital limit of Rs. 2.5 crores, and a short-term loan of Rs. 0.5 crores. The Corporate Debtor defaulted in repayment, leading IDBI Bank to issue a recall

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor committed a default in repayment of the loan to the extent of Rs. …

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

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**Reasoning:** The Adjudicating Authority, after reviewing the documents filed by the Creditor, found

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

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**Application:** The documents submitted by IDBI Bank, including loan agreements, statements of

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## Parties

- **Judges:** Bhaskara Pantula…; V. Nallasen…
- **Appellants:** IDBI Bank L…
- **Respondents:** Cyclo Transmission…

## Timeline

- **2006-12-20 — Sanction of Loan…**: IDBI Bank sanctioned fund-based limit of Rs. 2.5 crores and non-fund-based limit of Rs. 1…
- **2007-03-20 — Conversion of Non-Fund…**: Non-fund-based facility converted into…

## 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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