# In the matter of DMC Infrastructure Private Limited IB-804-ND-2020

> NCLT judgment dated 2021-04-15. Citation: TCN-2021-NCLT-02380. Corporation Bank, a Financial Creditor (FC), filed an application under Section 7 of the…

- **Court:** NCLT
- **Order date:** 15 Apr 2021
- **Citation:** TCN-2021-NCLT-02380
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/dmc-infrastructure-private-limited-ib-804-nd-2020-d4288ca6

## Summary

### Background

Corporation Bank, a Financial Creditor (FC), filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against DMC Infrastructure Private Limited, the Corporate Debtor (CD). The CD is a corporate guarantor for two principal borrowers, J.B. Gold Private Limited and Roshini Jewellers Private Limited, for a debt of Rs 22.85 crore as of 10.03.2020. The FC had sanctioned Overdraft (OD) facilities to the principal borrowers, and guarantee agreements were executed by the CD in favor of the FC. The principal borrowers defaulted on their loan repayments and were declared NPAs. The FC issued notices under Section 13(2) of the SARFAESI Act and filed a recovery suit before the Debt Recovery

…

## Facts

Corporation Bank (FC) sanctioned Overdraft (OD) facilities to Roshini Jewellers Pvt Ltd and J.B. Gold Pvt Ltd on 25.06.2013, with guarantee agreements executed by DMC Infrastructure Pvt Ltd (CD) on 27.06.2013. The OD facility was for Rs 9.00 crore each. Both principal borrowers defaulted, leading to their accounts being declared NPAs on 16.06.2017 and 30.09.2017, respectively. The FC issued notices under section 13(2) of SARFAESI Act on 05.09.2017 and 09.10.2017. The FC filed a recovery suit before Debt Recovery Tribunal (DRT), New Delhi. The CD is a corporate guarantor for the two principal borrowers. The total debt due as of 10.03.2020 was Rs 22.85 crore (Rs 11.45 cr from Roshini Jewellers and Rs 11.40 cr from JB Gold). The application under Section 7 of IBC was

…

## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor (FC) under Section 7 of the Insolvency and …

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

…

**Reasoning:** The NCLT considered the documents and evidence presented by the FC, including the

…

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

…

**Application:** The NCLT applied Section 7 to the facts of the case and determined that the FC

…

## Parties

- **Judges:** ABNI RANJAN KUMAR…; K.K. V…
- **Appellants:** Corporatio…
- **Respondents:** DMC Infrastructure…

## Timeline

- **2013-06-25 — Sanction of Overdraft…**: FC sanctioned Overdraft (OD) facility of Rs 9.00 crore in favour of principal borrower,…
- **2013-06-27 — Execution of Guarantee…**: A guarantee agreement (tripartite agreement) was executed by CD in favour of FC for OD…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(8) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclt-chandigarh/dmc-infrastructure-private-limited-ib-804-nd-2020-d4288ca6