# In the matter of Maxim Infrastructure & Real Estate Ltd. CP (IB)-04-GB-2018

> NCLT judgment dated 2018-08-31. Citation: TCN-2018-NCLT-00840. Bank of India, as a financial creditor, filed an application under Section 7 of the Insolvency…

- **Court:** NCLT
- **Order date:** 31 Aug 2018
- **Citation:** TCN-2018-NCLT-00840
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/maxim-infrastructure-real-estate-ltd-cp-ib-04-gb-2018-0ed1251c

## Summary

### Background

Bank of India, as a financial creditor, filed an application under Section 7 of the Insolvency & Bankruptcy Code, 2016, read with Rule 4 of the Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules, 2016, against M/s Maxim Infrastructure & Real Estate Ltd., the corporate debtor. The corporate debtor had approached a consortium of 7 banks, including Bank of India, for financial assistance. The consortium, with State Bank of India as the lead bank, sanctioned a total loan of Rs. 159.24 crores. Bank of India's contribution was Rs. 19 crores. Individual sanction letters were issued, and a Common Loan Agreement and Security Agent Agreement were executed on 24.11.2010. The corporate debtor also executed a deed of hypothecation. Corporate and

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## Facts

Bank of India filed an application under Section 7 of the Insolvency & Bankruptcy Code, 2016 against M/s Maxim Infrastructure & Real Estate Ltd. The corporate debtor had approached a consortium of 7 banks, including Bank of India, for financial assistance, resulting in a total loan of Rs. 159.24 crores, with Bank of India contributing Rs. 19 crores. Individual sanction letters were issued, and a Common Loan Agreement and Security Agent Agreement were executed on 24.11.2010. The corporate debtor also executed a deed of hypothecation, and corporate and personal guarantees were provided. Equitable mortgages were created over various properties. The corporate debtor defaulted on repayment, leading to the loan account being classified as NPA on 31.12.2015. Loan

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## Issues and analysis

### Issue 1: Whether the Power of Attorney dated 28.04.2017 and the authorization letter dated 26.06.2018, …

**Ratio:** A company, being a juristic person, is capable of initiating and defending legal

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**Reasoning:** The NCLT examined the memoranda and board resolutions presented by the financial creditor

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**Interpretation:** The court interpreted Section 179 of the Companies Act, 2013, to mean that the

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**Application:** The NCLT applied the ratio to the facts of the case, finding that the General

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## Parties

- **Judges:** P. K. S…
- **Appellants:** Bank of…
- **Respondents:** M/s Maxim…

## Timeline

- **2010-07-27 — Sanction…**: Financial Creditor initially…
- **2010-11-24 — Common Loan Agreement and Security Agent…**: The Corporate Debtor and the Consortium Banks signed and executed a Common Loan Agreement…

## 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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