# In the matter of FatheyporI Gardens Pvt Ltd CP-584- (IB)-CB-2018

> NCLT judgment dated 2018-10-05. Citation: TCN-2018-NCLT-00645. The case involves a Company Petition filed under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 5 Oct 2018
- **Citation:** TCN-2018-NCLT-00645
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/fatheypori-gardens-pvt-ltd-cp-584-ib-cb-2018-989ffe23

## Summary

### Background

The case involves a Company Petition filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, by State Bank of India (SBI), the Financial Creditor, against M/s. Fatheypori Gardens Pvt Ltd, the Respondent/Corporate Guarantor. The debt arises out of a Corporate Guarantee executed by the respondent for Rs. 1547.17 crore in favor of the Financial Creditor and other consortium banks, guaranteeing the repayment of credit facilities granted to Surana Corporation Limited (Borrower). SBI had originally sanctioned fund-based and non-fund-based facilities to the borrower, which were later restructured and renewed. The borrower failed to comply with the restructuring package, leading to the accounts being classified as NPA.

## Facts

State Bank of India (SBI), the Financial Creditor, filed a Company Petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against M/s. Fatheypori Gardens Pvt Ltd, the Respondent/Corporate Guarantor. The debt arose from a Corporate Guarantee executed by the respondent for Rs. 1547.17 crore in favor of SBI and other consortium banks, guaranteeing the repayment of credit facilities granted to Surana Corporation Limited (Borrower). SBI had sanctioned fund-based and non-fund-based facilities to the borrower, which were later restructured. The borrower failed to comply with the restructuring package approved on 28.10.2014 and failed to service the interest from October 2014, leading to the accounts being classified as NPA on 28.06.2014. The total amount in

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## Issues and analysis

### Issue 1: Whether the petition filed by the Financial Creditor under Section 7 of the Insolvency and …

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

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**Reasoning:** The Tribunal observed that the Financial Creditor had filed the petition under Section 7

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

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**Application:** In this case, the Financial Creditor, SBI, filed the petition under Section 7

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## Parties

- **Judges:** Ch. Mohd Sharief…; S. VIJAYARA…
- **Appellants:** State Bank of…
- **Respondents:** M/s. FATHEYPORI…

## Timeline

- **2014-10-01 — Borrower fails to…**: The borrower failed to service…
- **2014-10-28 — CDR EG Ap…**: The borrower failed to comply with the…

## 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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