# In the matter of NRS Projects Private Limited CP (IB) No. 38-7-NCLT-AHM-2019

> NCLT judgment dated 2019-07-25. Citation: TCN-2019-NCLT-02285. Fedbank Financial Services Limited filed an application under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 25 Jul 2019
- **Citation:** TCN-2019-NCLT-02285
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/nrs-projects-private-limited-cp-ib-no-38-7-nclt-ahm-2019-0f6553e9

## Summary

### Background

Fedbank Financial Services Limited filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against NRS Projects Private Limited due to a default on a term loan facility. The financial creditor claimed a default of Rs. 2,94,94,733 as of December 7, 2018. Notices were issued to the corporate debtor, but no one appeared on their behalf. The applicant stated that the corporate debtor had availed a credit facility and assured repayment in 42 monthly installments, but defaulted.

## Facts

Fedbank Financial Services Limited (the financial creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against NRS Projects Private Limited (the corporate debtor). The financial creditor claimed that the corporate debtor defaulted on a term loan facility. The total amount of debts granted was Rs. 5,00,00,000, and the amount claimed to be in default was Rs. 2,94,94,733 as of December 7, 2018. The corporate debtor, along with co-borrowers, had executed a demand promissory note and letter of continuity for the loan. The financial creditor provided details of the loan disbursement and the default in the prescribed proforma. Despite repeated requests and reminders, the

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## Issues and analysis

### Issue 1: Whether the application filed by the financial creditor under Section 7 of the Insolvency and …

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

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**Reasoning:** The Adjudicating Authority examined the contents of the application and found that it was

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**Interpretation:** Section 7 provides the mechanism for a financial creditor to trigger the CIRP

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**Application:** In this case, the Adjudicating Authority found that the application was

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## Parties

- **Judges:** Harihar Prakash…
- **Appellants:** Fedbank Financial…
- **Respondents:** NRS Projects Pvt.…

## Timeline

- **2016-03-31 — Demand Promiss…**: NRS Projects Private Limited and co-borrowers executed a demand promissory note for Rs.…
- **2016-03-31 — Letter of Con…**: NRS Projects Private Limited and co-borrowers issued a letter of continuity for the…

## 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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