# In the matter of Emmvee Infrastructures (India) Pvt. Ltd. Company Petition (IB) No. 41-ALD-2019

> NCLT judgment dated 2020-10-13. Citation: TCN-2020-NCLT-00397. The financial creditor, Corporation Bank, filed a petition under Section 7 of the Insolvency &…

- **Court:** NCLT
- **Order date:** 13 Oct 2020
- **Citation:** TCN-2020-NCLT-00397
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/emmvee-infrastructures-india-pvt-ltd-company-petition-ib-no-41-ald-2019-7a66dc53

## Summary

### Background

The financial creditor, Corporation Bank, filed a petition under Section 7 of the Insolvency & Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against the corporate debtor, Emm Vee Infrastructures (India) Pvt. Ltd., due to its inability to liquidate its financial debt. The corporate debtor had approached the bank for a term loan facility of Rs. 25 Crores in 2012, which was sanctioned. Subsequently, another term loan facility of Rs. 12 Crores was also availed. The corporate debtor defaulted on repayments, leading to the account being classified as NPA. The applicant recalled the outstanding amounts and issued a demand notice under Section 13(2) of the SARFAESI Act, 2002. The corporate debtor acknowledged the debt in 2016.

## Facts

Corporation Bank, the financial creditor, filed a petition against Emm Vee Infrastructures (India) Pvt. Ltd., the corporate debtor, under Section 7 of the Insolvency and Bankruptcy Code, 2016. The corporate debtor had availed a term loan facility of Rs. 25 Crores in 2012, followed by another term loan of Rs. 12 Crores in 2013. The loans were sanctioned for developing residential apartments/projects namely "Dwarika Heights". The corporate debtor defaulted on repayments, leading to the account being classified as NPA on 03.09.2016. The applicant recalled the outstanding amounts and issued a demand notice under Section 13(2) of the SARFAESI Act, 2002, on 06.10.2016. The corporate debtor acknowledged the debt on 27.04.2016 and 28.04.2016. The total outstanding

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## Issues and analysis

### Issue 1: Whether there is duly …

**Ratio:** The existence of a financial debt is a prerequisite for initiating CIRP under Section 7

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**Reasoning:** The Adjudicating Authority found that the corporate debtor admitted the debt and default

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**Interpretation:** Section 7 of the IBC requires the establishment of a financial debt and default

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**Application:** The corporate debtor's admission of debt and default established the existence

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## Parties

- **Judges:** Rajesh Daya…
- **Appellants:** Corporatio…
- **Respondents:** Emm Vee Infrastruc…; M/S EMMVEE…

## Timeline

- **2012-08-17 — Loan Appli…**: Corporate Debtor approached the applicant bank/Financial Creditor for grant of term loan…
- **2012-10-17 — Loan San…**: Applicant bank/financial Creditor…

## 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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