# In the matter of Lanco Babandh Power Ltd. CP (IB) No. 296-7-HDB-2018

> NCLT judgment dated 2018-08-29. Citation: TCN-2018-NCLT-00870. ICICI Bank Limited, styling itself as a Financial Creditor, filed a petition under Section 7 of…

- **Court:** NCLT
- **Order date:** 29 Aug 2018
- **Citation:** TCN-2018-NCLT-00870
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/lanco-babandh-power-ltd-cp-ib-no-296-7-hdb-2018-9d5f2c43

## Summary

### Background

ICICI Bank Limited, styling itself as a Financial Creditor, filed a petition under Section 7 of the Insolvency & Bankruptcy Code 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against Lanco Babandh Power Limited, styling itself as a Corporate Debtor. The petition was filed due to the Corporate Debtor's default in repayment of financial debt. The Corporate Debtor cited various reasons for the project's failure, including delays in approvals, non-approval of drawings, and de-allocation of a coal block.

## Facts

ICICI Bank Limited, claiming to be a Financial Creditor, initiated proceedings under Section 7 of the Insolvency & Bankruptcy Code, 2016 against Lanco Babandh Power Limited, the Corporate Debtor. The petition was based on the Corporate Debtor's alleged default in repaying its financial debt. ICICI Bank had granted various term loans, letters of credit, and bank guarantees to Lanco Babandh Power Limited. The loans were later restructured into a rupee term loan. The account of the Corporate Debtor was declared NPA (Non-Performing Asset). ICICI Bank issued a recall notice demanding payment of the outstanding amount. The Corporate Debtor cited reasons for the project's failure, including delays in approvals, non-approval of drawings, and de-allocation of a coal block.

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## Issues and analysis

### Issue 1: Whether the petition filed by ICICI Bank under Section 7 of the Insolvency & Bankruptcy Code, …

**Ratio:** The legal principle applied is that if a default has occurred in respect of a financial

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**Reasoning:** The court reasoned that the documents filed by ICICI Bank clearly substantiated the

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**Interpretation:** The interpretation of Section 7 of the IBC and the Supreme Court's judgment is

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**Application:** The ratio and reasoning were applied to the specific facts of the case, where

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## Parties

- **Judges:** BIKKI RAVEENDRA…
- **Appellants:** ICICI Ban…
- **Respondents:** Lanco Babandh…

## Timeline

- **2010-07-09 — Common Rupee Loan…**: Senior RTL-I, LC Facility-I and Subordinate LRTL-I was granted vide Common Rupee Loan…
- **2012-10-18 — ISDA Master A…**: Derivative Indian Rupees 700.0 million vide ISDA Master Agreement dated 18.10.2012 and…

## 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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