# In the matter of Neo Infrastructure Pvt. Ltd. C.P. No. (IB)-875(PB)-2018

> NCLT judgment dated 2019-02-01. Citation: TCN-2019-NCLT-05047. Bank of Baroda, the financial creditor, filed a petition under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 1 Feb 2019
- **Citation:** TCN-2019-NCLT-05047
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/neo-infrastructure-pvt-ltd-cp-no-ib-875pb-2018-1a253a68

## Summary

### Background

Bank of Baroda, the financial creditor, filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against Neo Infrastructure Private Limited, the corporate debtor. The financial creditor sought to trigger CIRP due to defaults in repayment of a term loan facility. Neo Infrastructure Private Limited, as a co-borrower with Brys International Pvt. Ltd., had approached Bank of Baroda for credit facilities to finance a residential housing project called 'BRYS BUZZ'. The loan was sanctioned on 18.06.2014 and 10.07.2014 for Rs. 150 crores. The corporate debtor executed several documents towards availing the credit facilities. The account of the corporate debtor was declared as Non-Performing

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## Facts

Neo Infrastructure Private Limited (Corporate Debtor) approached Bank of Baroda (Financial Creditor) for credit facilities to finance a residential housing project called 'BRYS BUZZ' in Noida. The loan of Rs. 150 crores was sanctioned on 18.06.2014 and 10.07.2014. Neo Infrastructure acted as a co-borrower with Brys International Pvt. Ltd. Rahul Gaur and Navneet Bhadla, directors of both firms, provided personal guarantees. Arnica Financials Consultants Private Limited acted as a corporate guarantor. The loan was secured by a second Pari Passu charge on leasehold rights of land at Plot No. SC-01/A-02 Logix Sports City, Sector-150, Noida, and a first Pari Passu charge on the super structure of the project, moveable assets, book debts, and bank accounts. The account was

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## Issues and analysis

### Issue 1: Whether the Financial Creditor's application under Section 7 of the Insolvency and Bankruptcy Code, …

**Ratio:** Section 7(5) of the IBC states that the Adjudicating Authority must be satisfied that a

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**Reasoning:** The NCLT found that the application was complete as per the requirements of Section 7(2)

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**Interpretation:** Section 7 of the IBC provides the mechanism for a financial creditor to

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**Application:** The NCLT applied Section 7(5) of the IBC to the facts of the case and

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## Parties

- **Judges:** M. M. K…; S. K. MOH…
- **Appellants:** Bank of B…
- **Respondents:** Neo Infrastructure…

## Timeline

- **2014-06-18 — Loan Sanc…**: Bank of Baroda sanctioned a term loan of Rs.…
- **2014-07-10 — Loan Sanc…**: Modification in sanction terms for the loan of Rs. 150 crores to Neo Infrastructure Pvt.…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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