# In the matter of Nimitaya Steel & Resorts Ltd.(IB)-1913(ND)-2019

> NCLT judgment dated 2021-12-24. Citation: TCN-2021-NCLT-00034. Indian Bank (formerly Allahabad Bank) filed an application under Section 7 of the Insolvency…

- **Court:** NCLT
- **Order date:** 24 Dec 2021
- **Citation:** TCN-2021-NCLT-00034
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/nimitaya-steel-resorts-ltdib-1913nd-2019-97327dee

## Summary

### Background

Indian Bank (formerly Allahabad Bank) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s. Nimitaya Hotel and Resorts Limited, the Corporate Debtor. The matter was previously heard and reserved for orders on 2020-02-10. However, due to subsequent developments and directions from the Delhi High Court regarding the Corporate Debtor's OTS proposal, the matter remained pending. The Corporate Debtor had requested time to consider an OTS proposal. The matter was finally heard on 2021-12-13 and reserved for orders.

## Facts

Indian Bank, the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate CIRP against M/s. Nimitaya Hotel and Resorts Limited, the Corporate Debtor. The Corporate Debtor was incorporated on 2006-09-27. The Financial Creditor had sanctioned a bank guarantee limit of Rs. 0.80 crore on 2010-03-25, which was subsequently enhanced to Rs. 1.50 crore and then to Rs. 3 crore. An overdraft limit of Rs. 92 crore was also sanctioned, later enhanced to Rs. 98 crore and then to Rs. 108 crore. The account was classified as NPA on 2017-11-02. As of 2019-07-25, the total amount in default was Rs. 134,42,28,195. The Corporate Debtor admitted to the debt and proposed an OTS, paying Rs. 158 crore out of Rs. 260 crore by

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## Issues and analysis

### Issue 1: Whether the Applicant has established the default in payment of the Financial Debt by the Corporate …

**Ratio:** Section 7(5) of the Insolvency and Bankruptcy Code, 2016, allows for the admission of a

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**Reasoning:** The court observed that the Applicant had clearly established the default made by the

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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 court applied the ratio to the facts, noting that the Corporate Debtor

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## Parties

- **Judges:** SHRI. ABNI RANJAN…; Shri. L. N.…
- **Appellants:** Indian…
- **Respondents:** M/s. Nimitaya…

## Timeline

- **2010-03-25 — Initial Bank G…**: Financial Creditor sanctioned a fresh…
- **2010-06-03 — Enhanced Bank…**: The bank guarantee limit was…

## 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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