# In the matter of Monnet Power Company Ltd. CP No. 1696-(MAH)-2017

> NCLT judgment dated 2018-02-23. Citation: TCN-2018-NCLT-01784. IDFC Bank Limited filed an application under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 23 Feb 2018
- **Citation:** TCN-2018-NCLT-01784
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/monnet-power-company-ltd-cp-no-1696-mah-2017-a083b909

## Summary

### Background

IDFC Bank Limited filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Monnet Power Company Limited, a corporate debtor, due to a financial debt of ₹586,54,64,341. The corporate debtor had availed several loan facilities from various banks, including IDFC Bank. The application was filed on 2017-12-05.

## Facts

Monnet Power Company Limited availed loan facilities from various banks, including IDFC Bank. As of the petition, the outstanding amount to IDFC Bank was ₹586,54,64,341, including principal, interest, fees, and revised interest. A Common Rupee Loan Agreement was executed on 2010-08-23 between Monnet Power Company Limited and several banks and financial institutions. A Debt Restructuring Agreement was executed on 2014-09-12 between IDFC Limited and other banks. The Corporate Debtor was classified as a Non-Performing Asset (NPA) in June 2015. The default of non-payment is not in dispute, and the Respondent has admitted the liability. The Financial Debt had been classified as “Non-Performing Asset" in the books of the Financial Creditor with effect from 2015-06-30.

## Issues and analysis

### Issue 1: Whether the petition filed by the Financial Creditor, IDFC Bank Limited, under Section 7 of the …

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

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**Reasoning:** The court reasoned that the Financial Debtor had failed to pay the amounts due and also

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

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**Application:** The court applied Section 7 to the facts, noting that the Financial Debtor had

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## Parties

- **Judges:** M.K. Sh…; Bhaskara Pantula…
- **Appellants:** IDFC Bank…
- **Respondents:** Monnet Power…; Monnet Power…

## Timeline

- **2010-08-23 — Common Rupee Loan…**: Agreement executed between Monnet Power Company Limited and the Banks and Financial…
- **2014-09-12 — Debt Restructuring…**: Agreement executed between IDFC Limited and…

## 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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