# In the matter of Lanco Mandakini Hydro Energy Pvt. Ltd. Company Petition (IB)No.85-ALD-2020

> NCLT judgment dated 2020-06-11. Citation: TCN-2020-NCLT-01189. Axis Bank Ltd. filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 11 Jun 2020
- **Citation:** TCN-2020-NCLT-01189
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/lanco-mandakini-hydro-energy-pvt-ltd-company-petition-ibno85-ald-2020-6fcb74fa

## Summary

### Background

Axis Bank Ltd. filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against Lanco Mandakini Hydro Energy Pvt. Ltd. The petition was based on the corporate debtor's inability to liquidate its financial debt. The financial creditor had sanctioned financial assistance in the form of term loans amounting to Rs. 138.24 Cr. The corporate debtor failed to adhere to the terms and conditions of the agreements, leading to the account being declared as NPA on September 30, 2017. The total amount of default outstanding was claimed to be Rs. 149,88,18,088.

## Facts

Axis Bank Ltd. (financial creditor) filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Lanco Mandakini Hydro Energy Pvt. Ltd. (corporate debtor). The financial creditor had sanctioned term loans amounting to Rs. 138.24 Cr. to the corporate debtor. The corporate debtor defaulted on the repayment of the loans, leading to its account being declared as NPA on September 30, 2017. The total amount of default outstanding was Rs. 149,88,18,088. The corporate debtor is a Hydro Electric Generation Company engaged in the construction of a 76 MW hydro Electric Power Plant on the river Mandakani, which project is still not completed. The date of default is 31st August, 2019. The financial creditor's application was found to be complete under

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## Issues and analysis

### Issue 1: Whether there is a duly …

**Ratio:** The existence of a financial debt is a prerequisite for initiating CIRP under Section 7

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**Reasoning:** The corporate debtor admitted the debt owed to the financial creditor. The financial

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**Interpretation:** A financial debt is defined under the IBC as a debt along with interest, if

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**Application:** In this case, the financial creditor provided evidence of the sanctioned term

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## Parties

- **Judges:** Rajesh Daya…
- **Appellants:** Axis Ban…
- **Respondents:** Lanco Mandakini…
- **Advocates:** Gunjan Ja…; Aditya…

## Timeline

- **2009-07-17 — Term Loans Sa…**: Financial creditor sanctioned term loans…
- **2017-09-30 — Account Decla…**: The account of the corporate…

## 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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