# In the matter of Khubchandani Hospitals Private Limited C.P. No. 4468-IBC-MB-2018

> NCLT judgment dated 2021-10-06. Citation: TCN-2021-NCLT-00818. Standard Chartered Bank, London, filed a company petition under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 6 Oct 2021
- **Citation:** TCN-2021-NCLT-00818
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/khubchandani-hospitals-private-limited-cp-no-4468-ibc-mb-2018-9c876c83

## Summary

### Background

Standard Chartered Bank, London, filed a company petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Khubchandani Hospitals Private Limited, seeking to initiate the Corporate Insolvency Resolution Process (CIRP). The financial debt claimed was USD 18,194,742.69, arising from an External Commercial Borrowing (ECB) facility agreement. The corporate debtor availed of an ECB from the financial creditor for up to USD 49,000,000, later revised to USD 45,000,000. Only USD 15,000,000 was disbursed in three tranches. The corporate debtor made part payments towards interest until May 27, 2015, after which no payments were received.

## Facts

Standard Chartered Bank, London, extended an External Commercial Borrowing (ECB) facility to Khubchandani Hospitals Private Limited. The initial facility agreement was for USD 49 million, later revised to USD 45 million. Only USD 15 million was disbursed in three tranches of USD 5 million each on August 30, 2013, October 31, 2013, and December 31, 2013. The Corporate Debtor made part payments towards interest until May 27, 2015, after which no further payments were made. The Financial Creditor issued an acceleration notice on January 5, 2017, after obtaining permission from the Reserve Bank of India (RBI) on December 7, 2016, due to defaults in interest payments since June 30, 2015. The Corporate Debtor challenged the maintainability of the insolvency application,

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## Issues and analysis

### Issue 1: Whether the claim underlying the Insolvency …

**Ratio:** The definition of 'default' under Section 3(12) of the Code means non-payment of debt

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**Reasoning:** The Bench noted that the Petitioner initiated CIRP with the default date of November 30,

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**Interpretation:** The limitation period for initiating CIRP commences from the date of default,

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**Application:** In this case, the first default occurred on June 30, 2015, but the CIRP was

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## Parties

- **Judges:** H.V. Subb…; Chandra Bha…
- **Appellants:** Standard Chartered…
- **Respondents:** Khubchandani…
- **Advocates:** Shyam Ka…; Fatema Kac…; +5 more

## Timeline

- **2013-05-22 — Facility Ag…**: Applicant bank and Corporate Debtor entered into a Facility Agreement for a loan of up to…
- **2013-08-19 — Amendment and…**: Applicant Bank and Corporate Debtor entered into an Amendment and Supplemental Agreement…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 3(12) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-3)

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