# In the matter of Lanco Solar Private Limited CP(IB)No. 20-7-HDB-2019

> NCLT judgment dated 2019-05-17. Citation: TCN-2019-NCLT-03278. Axis Bank Limited filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 17 May 2019
- **Citation:** TCN-2019-NCLT-03278
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/lanco-solar-private-limited-cpibno-20-7-hdb-2019-6700f0de

## Summary

### Background

Axis Bank Limited filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, against Lanco Solar Private Limited, the Corporate Debtor. The petition pertains to the default in repayment of Rupee term loan facilities extended by Axis Bank to Lanco Solar Private Limited. The financial creditor accorded the corporate debtor a rupee term loan facility of INR 100,00,00,000 (Facility 1) pursuant to the Loan Agreement dated April 22, 2010, and entered into various agreements collectively called as "Facility 1 Agreement". An additional Rupee term loan facility of INR 23,87,00,000 (Facility 2) was also granted for cost over-run, out of which a bank

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## Facts

Axis Bank Limited extended Rupee term loan facilities to Lanco Solar Private Limited. Facility 1 was a term loan of INR 100 Crore sanctioned on April 22, 2010. Facility 2 was an additional term loan of INR 23.87 Crore for cost overruns, including a bank guarantee of INR 16.35 Crore. The facilities were secured by various documents, including memoranda of entry, deeds of hypothecation, corporate guarantees from Lanco Infratech Limited and Lanco Solar Energy Private Limited, and pledge agreements. The date of default under Facility 1 was October 31, 2016, and under Facility 2 was February 3, 2018. A recall notice was issued on October 16, 2018. The total amount in default as of September 30, 2018, was INR 144,37,58,657.81. Lanco Solar Private Limited is setting up a

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor defaulted on its …

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

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**Reasoning:** The Adjudicating Authority found that the Corporate Debtor had defaulted on its repayment

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**Interpretation:** The term 'default' under the IBC is interpreted as non-payment of debt when due

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**Application:** The Financial Creditor placed documentary evidence viz., Copies of Facility

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## Parties

- **Judges:** K. Anantha…
- **Appellants:** Axis Bank L…
- **Respondents:** Lanco Solar…

## Timeline

- **2010-04-22 — Loan Agreeme…**: Date of the Loan…
- **2016-10-31 — Date of Default -…**: Date of default under…

## 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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