# In the matter of MIC Electronics Limited C.P. (IB) No. 24-7-HDB-2018

> NCLT judgment dated 2018-03-13. Citation: TCN-2018-NCLT-01713. SREI Equipment Finance Limited, styling itself as Financial Creditor, filed a petition under…

- **Court:** NCLT
- **Order date:** 13 Mar 2018
- **Citation:** TCN-2018-NCLT-01713
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/mic-electronics-limited-cp-ib-no-24-7-hdb-2018-bad1b4b9

## Summary

### Background

SREI Equipment Finance Limited, styling itself as Financial Creditor, 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, requesting the commencement of Corporate Insolvency Resolution Process in respect of MIC Electronics Limited, styling it as Corporate Debtor. The petitioner claims a default of Rs.418,509,879/- as per the Loan-cum-Hypothecation Agreement dated 22.09.2016. The respondent raised objections, including the petitioner not being a Financial Creditor and suppression of facts regarding the value of movable properties and pending execution petitions.

## Facts

SREI Equipment Finance Limited filed a petition against MIC Electronics Limited under Section 7 of the Insolvency and Bankruptcy Code, claiming to be a financial creditor. The claim arises from a Loan-cum-Hypothecation Agreement dated 22.09.2016, with a total default of Rs.418,509,879/-. The agreement restructured previous loan agreements. MIC Electronics Limited pledged shares and provided collateral security, including land. SREI Equipment Finance Limited issued a final notice of default on 13.07.2017, which was received by MIC Electronics Limited on 17.07.2017. MIC Electronics Limited raised objections, stating that SREI Equipment Finance Limited is not a financial creditor as defined in Section-5 (7) of IBC Code 2016, and that SREI Equipment Finance Limited

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## Issues and analysis

### Issue 1: Whether the petition filed by SREI Equipment Finance Limited under Section 7 of the Insolvency and …

**Ratio:** The Hon'ble Supreme Court in Innoventive Industries Ltd Vs ICICI Bank and another held

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**Reasoning:** The Adjudicating Authority found that there was a financial debt and a default in

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**Interpretation:** Section 7 of the IBC allows a financial creditor to initiate CIRP against a

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**Application:** The Adjudicating Authority determined that SREI Equipment Finance Limited had

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## Parties

- **Judges:** BIKKI RAVEENDRA…
- **Appellants:** SREI Equipment…
- **Respondents:** MIC Electronics…

## Timeline

- **2016-09-22 — Loan-cum-Hypothecation…**: Loan-cum-Hypothecation Agreement bearing No.116741 entered into between the Respondent…
- **2017-07-13 — Final Notice o…**: The Petitioner issued a final…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(7) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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