# In the matter or VME Properties Private Limited CP(IB)-85-CHE-2021

> NCLT judgment dated 2021-09-02. Citation: TCN-2021-NCLT-01201. The case involves an application filed by Alchemist Asset Reconstruction Company Limited, the…

- **Court:** NCLT
- **Order date:** 2 Sept 2021
- **Citation:** TCN-2021-NCLT-01201
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/in-the-matter-or-vme-properties-private-limited-cpib-85-che-2021-844fc11b

## Summary

### Background

The case involves an application filed by Alchemist Asset Reconstruction Company Limited, the Financial Creditor, under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s. VME Properties Private Limited, the Corporate Debtor. The Financial Creditor claims that the Corporate Debtor defaulted on a financial debt of Rs.88,83,68,570/-. The Corporate Debtor had approached UCO Bank in 2008 for credit facilities, which were later restructured. UCO Bank assigned the loan to Alchemist Asset Reconstruction Co. Ltd. in 2016. The Corporate Debtor's account was restructured, but the Corporate Debtor failed to maintain the credit facilities and defaulted on repayments. The Financial Creditor declared the

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## Facts

Alchemist Asset Reconstruction Company Limited filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against VME Properties Private Limited. VME Properties Private Limited had approached UCO Bank in 2008 for credit facilities amounting to Rs.24 Crore. The Corporate Debtor deposited title deeds of properties in Valla Village, Sriperumpudur Taluk, Kancheepuram District, creating an equitable mortgage in favor of UCO Bank. The account was restructured in 2012. The repayment of the loan was guaranteed by V. Manickam, M. Kannan, and M. Karthik, and by VME Properties Pvt. Ltd. UCO Bank filed OA No. 115/2014 before the Debt Recovery Tribunal II, Chennai, for recovery of dues of

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## Issues and analysis

### Issue 1: Whether the Financial Creditor has proven the existence of a financial debt and default on the part …

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

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**Reasoning:** The Tribunal noted that the Corporate Debtor admitted its liability and inability to pay

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**Interpretation:** The term 'financial debt' is interpreted broadly to include amounts disbursed

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**Application:** In this case, the Financial Creditor presented evidence of the credit

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## Parties

- **Judges:** R. Sucha…; Anil Ku…
- **Appellants:** Alchemist Asset…
- **Respondents:** M/s. VME Propertie…
- **Advocates:** K.S. Viswa…; Shanmuga Su…

## Timeline

- **2008-01-01 — Corporate Debtor…**: The Corporate Debtor approached UCO Bank for grant of certain credit facilities for…
- **2012-08-14 — UCO Bank Sancti…**: UCO Bank renewed and sanctioned credit facilities vide their sanction letter dated…

## 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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