# In the matter of GVS Infra & Industries Private Limited CP (IB) No. 353-7-HDB-2020

> NCLT judgment dated 2021-10-01. Citation: TCN-2021-NCLT-00910. The case involves an application filed by UCO Bank, the Financial Creditor, under Section 7 of…

- **Court:** NCLT
- **Order date:** 1 Oct 2021
- **Citation:** TCN-2021-NCLT-00910
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/gvs-infra-industries-private-limited-cp-ib-no-353-7-hdb-2020-5de487f1

## Summary

### Background

The case involves an application filed by UCO Bank, the Financial Creditor, under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against GVS Infra & Industries Private Limited, the Corporate Debtor. The Corporate Debtor had approached the Financial Creditor for credit facilities, which were sanctioned in the form of term loans under the UCO Rent Scheme. The Corporate Debtor defaulted in repayment, leading the Petitioner Bank to classify the loan account as a Non-Performing Asset (NPA) and initiate recovery proceedings before the Debts Recovery Tribunal (DRT).

## Facts

GVS Infra & Industries Private Limited (formerly SSVG Engineering Projects Pvt. Ltd) approached UCO Bank for credit facilities. UCO Bank sanctioned a term loan of Rs. 1,77,50,000/- on 2006-06-29 under the UCO Rent Scheme, and the Corporate Debtor executed loan documents and a guarantee agreement on the same date. Subsequently, UCO Bank sanctioned another term loan of Rs. 1,50,00,000/- on 2006-08-04. A third loan of Rs. 22,00,00,000/- was sanctioned, which was later converted into a new loan of Rs. 3,75,00,000/-. The Corporate Debtor defaulted in repayment, leading UCO Bank to classify the loan account as an NPA on 2011-06-29. UCO Bank initiated recovery proceedings before the Debts Recovery Tribunal (DRT), Hyderabad, and invoked SARFAESI proceedings. The DRT

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016, is …

**Ratio:** A judgment or decree for money in favor of the Financial Creditor, passed by the DRT, or

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**Reasoning:** The court relied on the Supreme Court's judgment in Dena Bank vs C. Shivakumar Reddy,

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**Interpretation:** The Supreme Court's judgment in Dena Bank vs C. Shivakumar Reddy clarifies the

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**Application:** In this case, the Corporate Debtor defaulted in repayment of loans, and the

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## Parties

- **Judges:** Madan B.…; Veera Brahma Rao…
- **Respondents:** GVS Infra &…

## Timeline

- **2006-06-29 — Term Loan San…**: UCO Bank sanctioned a term loan of Rs. 1,77,50,000/- to GVS Infra & Industries Private…
- **2006-06-29 — Loan Documents…**: GVS Infra & Industries Private Limited executed loan documents and a guarantee agreement…

## 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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