# In the matter of Orchid Pharma Limited CP-540-(IB)-CB-2017

> NCLT judgment dated 2017-08-17. Citation: TCN-2017-NCLT-00604. Lakshmi Vilas Bank Limited, the operational creditor, filed a company petition against Orchid…

- **Court:** NCLT
- **Order date:** 17 Aug 2017
- **Citation:** TCN-2017-NCLT-00604
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/orchid-pharma-limited-cp-540-ib-cb-2017-96f7ebac

## Summary

### Background

Lakshmi Vilas Bank Limited, the operational creditor, filed a company petition against Orchid Pharma Limited, the corporate debtor, under Section 9 of the Insolvency and Bankruptcy Code, 2016. The bank sought to initiate the Corporate Insolvency Resolution Process (CIRP) due to outstanding dues of Rs. 20,62,01,053.80/-. The corporate debtor had availed a loan of Rs. 50 crores from the bank, secured by mortgaging certain properties. Upon default in repayment, the bank initiated recovery proceedings under the SARFAESI Act, 2002. Subsequently, the bank leased certain property to the corporate debtor, who paid monthly lease rent until January 2016, after which defaults occurred.

## Facts

Lakshmi Vilas Bank Limited (the 'Petitioner/Operational Creditor') filed a petition against Orchid Pharma Limited (the 'Respondent/Corporate Debtor') under Section 9 of the Insolvency and Bankruptcy Code, 2016 ('IB Code 2016'). The Respondent had availed a loan of Rs. 50 crores from the Petitioner, secured by mortgaging properties. The Respondent defaulted on loan repayment, leading the Petitioner to initiate recovery under the SARFAESI Act, 2002. Subsequently, the Petitioner leased property to the Respondent, who paid monthly rent until January 2016. The Respondent then defaulted on rent payments, accumulating arrears of Rs. 20,62,01,053.80/-. The Petitioner issued a demand notice on 14.06.2017 under Section 8 of the IB Code 2016. The Respondent claimed the lease deed

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## Issues and analysis

### Issue 1: Whether the petition filed by the operational creditor is maintainable under Section 9 of the …

**Ratio:** The ratio is that if the operational creditor has complied with the requirements of

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**Reasoning:** The court reasoned that the petitioner had approached the Adjudicating Authority by

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**Interpretation:** Section 9 of the IBC allows an operational creditor to initiate CIRP against a

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**Application:** The court found that the operational creditor had met the requirements of

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## Parties

- **Judges:** K. Anantha…
- **Appellants:** Lakshmi Vilas…
- **Respondents:** Orchid Pharma…
- **Advocates:** A. K. Myl…; T.K. Bh…

## Timeline

- **N/A — Loan Ava…**: Orchid Pharma Limited availed a loan of Rs. 50…
- **2013-10-07 — Lease De…**: Lakshmi Vilas Bank Limited leased…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 9 — Application for initiation of corporate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-9)

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