# In the matter of Phadnis Resorts and Spa India Limited C.P.(IB)-3603-(MB)-2018

> NCLT judgment dated 2019-03-14. Citation: TCN-2019-NCLT-04430. Union Bank of India filed a petition on 2018-09-14 under Section 7 of the Insolvency &…

- **Court:** NCLT
- **Order date:** 14 Mar 2019
- **Citation:** TCN-2019-NCLT-04430
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/phadnis-resorts-and-spa-india-limited-cpib-3603-mb-2018-6344878e

## Summary

### Background

Union Bank of India filed a petition on 2018-09-14 under Section 7 of the Insolvency & Bankruptcy Code, 2016, against Phadnis Resorts and Spa India Limited (PR&SIL) to claim an outstanding financial debt of ₹10 Crores. The debt was in the nature of a Term Loan sanctioned on 2015-06-30 and disbursed on the same date. PR&SIL had approached UBI on 2015-06-27 for a loan of ₹15 Crores under the Union Bank Mortgage Scheme for augmenting working capital and other operational needs. The property of the Debtor Company was mortgaged.

## Facts

Union Bank of India (UBI) filed a petition against Phadnis Resorts and Spa India Limited (PR&SIL) under Section 7 of the Insolvency & Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) due to an outstanding financial debt of ₹10 Crores. The debt arose from a Term Loan sanctioned by UBI on 2015-06-30 and disbursed on the same date. PR&SIL had requested a loan of ₹15 Crores under the Union Bank Mortgage Scheme on 2015-06-27 for working capital and operational needs, mortgaging its property as security. The loan was to be repaid within 12 months as a bullet repayment with monthly interest servicing. UBI issued a Demand Notice on 2016-10-17 after PR&SIL defaulted, classifying the account as NPA on 2016-09-30. The debt

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## Issues and analysis

### Issue 1: Whether the petition filed by Union Bank of India against Phadnis Resorts and Spa India Limited …

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

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**Reasoning:** The court considered the documents submitted by the petitioner, including the loan

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

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**Application:** The court applied Section 7 to the facts of the case, finding that Union Bank

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## Parties

- **Judges:** M.K. Sh…
- **Appellants:** Union Bank of…
- **Respondents:** Phadnis Resorts…

## Timeline

- **2015-06-27 — Loan Appli…**: Phadnis Resorts and Spa India Limited approached Union Bank of India for a loan of ₹15…
- **2015-06-30 — Loan Sanctioned and…**: Union Bank of India sanctioned and disbursed a Term Loan of ₹10 Crores to Phadnis Resorts…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(8) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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