# In the matter of Mindlogicx Infratec Limited C.P. (IB) No. 275-BB-2019

> NCLT judgment dated 2020-12-07. Citation: TCN-2020-NCLT-00143. Corporation Bank, a financial creditor, filed a petition under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 7 Dec 2020
- **Citation:** TCN-2020-NCLT-00143
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/mindlogicx-infratec-limited-cp-ib-no-275-bb-2019-94846d5a

## Summary

### Background

Corporation Bank, a financial creditor, filed a petition under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, against Mindlogicx Infratec Limited, the corporate debtor, seeking to initiate Corporate Insolvency Resolution Process (CIRP) due to a default in payment of Rs. 15,22,11,780/-. The corporate debtor contested the petition, citing ongoing settlement negotiations, payments made, and the impact of the Covid-19 pandemic on its business. The corporate debtor also highlighted that the NPA classification by the bank was quashed by the High Court.

## Facts

Corporation Bank extended a term loan of Rs. 9,28,66,590/- and an overdraft facility of Rs. 1,00,00,000/- to Mindlogicx Infratec Limited on 30.05.2013. Mindlogicx Infratec Limited defaulted on repayments, leading Corporation Bank to classify the account as a Non-Performing Asset (NPA) on 29.05.2014. Corporation Bank initiated recovery measures, including sending notices and taking possession of immovable assets under SARFAESI. Mindlogicx Infratec Limited contested these actions, filing a writ petition before the High Court of Karnataka, which quashed the NPA classification. Mindlogicx Infratec Limited made payments totaling Rs. 7,13,67,854/-. Corporation Bank filed a petition under Section 7 of the IBC seeking to initiate CIRP against Mindlogicx Infratec Limited for a

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## Issues and analysis

### Issue 1: Whether the petition under Section 7 of the IBC is maintainable given the ongoing settlement …

**Ratio:** The IBC is not intended to be a substitute for a recovery forum and should not be used

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**Reasoning:** The court observed that the corporate debtor had approached the financial creditor for a

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**Interpretation:** The court interpreted the provisions of the IBC to mean that CIRP should not be

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**Application:** The court applied the ratio to the facts of the case, finding that the ongoing

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## Parties

- **Judges:** Rajeswara Rao…; Ashutosh C…
- **Appellants:** Sharada MurtyAnant…
- **Respondents:** Mindlogicx…

## Timeline

- **2013-05-30 — Loan Agre…**: Corporation Bank provided a term loan and overdraft facility to Mindlogicx Infratec…
- **2014-05-29 — NPA Classif…**: Corporation Bank classified Mindlogicx Infratec Limited's account as a Non-Performing…

## 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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