# in the matter of Easun Reyrolle Limited IBA-1045 & 1169-2019

> NCLT judgment dated 2020-05-05. Citation: TCN-2020-NCLT-01387. The case involves two applications, IBA/1045/2019 and IBA/1169/2019, filed under Section 7 of…

- **Court:** NCLT
- **Order date:** 5 May 2020
- **Citation:** TCN-2020-NCLT-01387
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/easun-reyrolle-limited-iba-1045-1169-2019-00ceebe6

## Summary

### Background

The case involves two applications, IBA/1045/2019 and IBA/1169/2019, filed 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. These applications were filed by Canara Bank and State Bank of India, respectively, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s. Easun Reyrolle Limited, the Corporate Debtor. Both applications relate to the same Corporate Debtor and are therefore disposed of through a common order. Canara Bank's claim in IBA/1045/2019 is Rs. 59,31,10,589.42 with interest until 18.07.2019, arising from an overdraft cash credit facility. State Bank of India's claim in IBA/1169/2019 is Rs. 204,89,03,878.20 as of

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## Facts

Canara Bank (IBA/1045/2019) claimed Rs. 59,31,10,589.42 with interest until 18.07.2019 from Easun Reyrolle Limited (Corporate Debtor) due to default on an overdraft cash credit facility. The Corporate Debtor, engaged in power management products, approached Canara Bank for a Rs. 30.00 Crore overdraft facility, which was sanctioned in 2013. The Corporate Debtor executed a demand promissory note and a hypothecation agreement as security. The facility was renewed in 2014. The Corporate Debtor became irregular in repayments, leading to a legal notice in 2018 and classification as NPA on 29.09.2017. State Bank of India (IBA/1169/2019) claimed Rs. 204,89,03,878.20 as of 31.08.2019 from the same Corporate Debtor, stemming from fund-based and non-fund-based credit facilities.

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## Issues and analysis

### Issue 1: Whether the applications filed by the Financial Creditors, Canara Bank and State Bank of India, …

**Ratio:** The ratio is that if a financial debt exists and a default has occurred, the Adjudicating

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**Reasoning:** The Tribunal reasoned that the Corporate Debtor had availed credit facilities from both

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**Interpretation:** Section 7 of the I&B Code, 2016, provides a mechanism for Financial

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**Application:** In this case, the Financial Creditors presented evidence of loan agreements,

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## Parties

- **Judges:** R. VARADH…; Anil Ku…
- **Appellants:** Canara…
- **Respondents:** Easun Reyrolle…; M/s. Easun…
- **Advocates:** T. Ravich…; T.K. Bh…; +1 more

## Timeline

- **2013-03-08 — Sanction…**: Canara Bank sanctioned an Over Draft Cash Credit facility of Rs. 30.00 Crores to Easun…
- **2013-06-19 — Execution of D…**: Easun Reyrolle Limited executed a Demand Promissory Note and a Common Hypothecation…

## 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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