# In the matter of Lanco Solar Energy Private Limited CP (IB) No. 518-7-HDB-2019

> NCLT judgment dated 2019-06-14. Citation: TCN-2019-NCLT-02912. Andhra Bank, the Financial Creditor, filed a petition under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 14 Jun 2019
- **Citation:** TCN-2019-NCLT-02912
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/lanco-solar-energy-private-limited-cp-ib-no-518-7-hdb-2019-07b557d3

## Summary

### Background

Andhra Bank, the Financial Creditor, filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Lanco Solar Energy Private Limited, the Corporate Debtor, due to default in repayment of loan facilities. The Corporate Debtor had approached the Financial Creditor for extension of credit facilities, which were granted. The Financial Creditor later renewed the working capital limits. However, the Corporate Debtor defaulted in payments. The Financial Creditor issued a notice under Section 13(2) of the SARFAESI Act. The Corporate Debtor requested the Financial Creditor to withhold the notice. The Corporate Debtor was unable to repay its loans/credit facilities. The Corporate Debtor claimed to have been profitable until 2012-13 and during 2015-2016

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## Facts

Andhra Bank extended credit facilities to Lanco Solar Energy Private Limited, including working capital loans and bank guarantees. The Corporate Debtor defaulted on these payments. Andhra Bank issued a notice under Section 13(2) of the SARFAESI Act. Lanco Solar Energy Private Limited requested Andhra Bank to withhold the notice. Lanco Solar Energy Private Limited claimed to have been profitable until 2012-13 and during 2015-2016 and 2016-2017, attributing its decline to external factors. Lanco Solar Energy Private Limited stated it was taking steps towards repayment by revamping operations and considering the joint sale of its investment with the liquidator of its parent company, Lanco Infratech Limited. Andhra Bank filed a petition under Section 7 of the Insolvency

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## Issues and analysis

### Issue 1: Whether the petition filed by the Financial Creditor under Section 7 of the Insolvency and …

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

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**Reasoning:** The Adjudicating Authority was satisfied that the Financial Creditor had fulfilled all

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**Interpretation:** Section 7 of the IBC provides the mechanism for financial creditors to initiate

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**Application:** The Financial Creditor provided documentary evidence to prove the default, and

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## Parties

- **Judges:** K. Anantha…
- **Appellants:** M/s. Andhr…
- **Respondents:** M/s. Lanco Solar…
- **Advocates:** Mr.K.Lakshmi…; Mr.M.Anil…; +2 more

## Timeline

- **2011-05-26 — Corporate Debtor…**: The Corporate Debtor approached the Financial Creditor requesting the extension of…
- **2014-08-28 — Financial Creditor…**: The Financial Creditor decided to extend certain credit facilities to 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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