# In the matter of IDEB Projects Pvt. Ltd. C.P.(BB) No.17-BB-2019

> NCLT judgment dated 2019-03-29. Citation: TCN-2019-NCLT-04258. Oriental Bank of Commerce filed a petition under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 29 Mar 2019
- **Citation:** TCN-2019-NCLT-04258
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/ideb-projects-pvt-ltd-cpbb-no17-bb-2019-99a4833e

## Summary

### Background

Oriental Bank of Commerce filed a petition under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against M/s. IDEB Projects Pvt. Ltd. The petition was based on the corporate debtor's failure to pay an outstanding amount of Rs. 36,18,52,994. The corporate debtor had approached the financial creditor and other banks for working capital assistance. A consortium agreement was entered into, and the corporate debtor availed a working capital credit limit of Rs. 38 crores from Oriental Bank of Commerce. The corporate debtor created a security interest in favor of the consortium banks. The financial creditor issued a renewal cum reduction of limits, but the corporate debtor failed to pay the amount

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## Facts

Oriental Bank of Commerce (OBC) is a banking company incorporated in 1980. IDEB Projects Pvt. Ltd. was incorporated on 17.04.1997. IDEB Projects approached OBC and other banks for working capital. OBC sanctioned credit facilities to IDEB Projects vide a letter dated 04.07.2007. A Working Capital Consortium Agreement was entered into on 11.07.2007, including SBI, State Bank of Hyderabad, State Bank of Patiala, State Bank of Travancore, and ICICI Bank. The consortium sanctioned a total working capital of Rs. 380 crores. IDEB Projects availed a working capital credit limit of Rs. 38 crores from OBC. IDEB Projects created a security interest in favor of the consortium banks. On 06.06.2009, OBC issued a Renewal Cum Reduction of certain limits. IDEB Projects utilized the

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## Issues and analysis

### Issue 1: Whether the instant Petition filed by the …

**Ratio:** Section 7 of the IBC permits a financial creditor, either individually or jointly with

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**Reasoning:** The NCLT reasoned that Oriental Bank of Commerce, being a financial creditor, had

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**Interpretation:** Section 7 of the IBC provides the legal basis for a financial creditor to

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**Application:** The ratio and reasoning apply to the facts of the case because Oriental Bank of

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## Parties

- **Judges:** Rajeswara Rao…; Ashok Kumar…
- **Appellants:** Oriental Bank of…
- **Respondents:** M/s.IDEB Projects…

## Timeline

- **2007-04-04 — Sanction…**: Oriental Bank of Commerce sanctioned…
- **2007-07-11 — Working Capital…**: Agreement entered into between…

## 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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