# In the matter of Gwalior Bypass Project Limited C.P. No. IB-1140(ND)-2018

> NCLT judgment dated 2019-05-29. Citation: TCN-2019-NCLT-03153. ICICI Bank Limited, the Financial Creditor, filed an application under Section 7 of the…

- **Court:** NCLT
- **Order date:** 29 May 2019
- **Citation:** TCN-2019-NCLT-03153
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/gwalior-bypass-project-limited-cp-no-ib-1140nd-2018-adc23e0a

## Summary

### Background

ICICI Bank Limited, the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against Gwalior Bypass Project Limited, the Corporate Debtor, due to defaults in loan repayments. The Corporate Debtor is a special purpose vehicle (SPV) entrusted with the construction of a 4-lane Gwalior Bypass Project. The Corporate Debtor argued that defaults were due to non-payment of annuities by the National Highways Authority of India (NHAI). The Financial Creditor claimed a default of Rs. 128,70,55,301.55 as of 27.08.2018. Several applications for intervention and impleadment were filed, including one by L&T Infrastructure Finance Company Limited, which were ultimately

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## Facts

ICICI Bank Limited (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Gwalior Bypass Project Limited (Corporate Debtor). The Corporate Debtor was incorporated on 23.06.2006. ICICI Bank disbursed loans aggregating to INR 91.5 crores to the Corporate Debtor. The Corporate Debtor defaulted on loan repayments. The account of the Corporate Debtor was classified as Special Mention Account (SMA)-2 on 02.03.2015 and as NPA on 15.04.2016. The total amount in default as on 27.08.2018 was Rs. 128,70,55,301.55. The Corporate Debtor is a Special Performance Vehicle (SPV) held by a consortium including Era Infra Engineering Ltd. (EIEL). The Corporate Debtor was

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## Issues and analysis

### Issue 1: Whether the application filed by ICICI Bank Limited 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 NCLT found that the Financial Creditor had demonstrated the occurrence of a default

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**Interpretation:** Section 7 of the IBC provides a mechanism for financial creditors to recover

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**Application:** The NCLT applied the provisions of Section 7 to the facts of the case, finding

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## Parties

- **Judges:** M. M. K…; DEEPTI M…
- **Appellants:** ICICI Bank…
- **Respondents:** Gwalior Bypass…

## Timeline

- **2006-06-23 — Incorporation of…**: Gwalior Bypass Project…
- **2014-09-08 — Loan Disbur…**: ICICI Bank Limited disbursed loans…

## 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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