# In the matter of Project Master Electricals Pvt. Ltd. CP (IB) 527-(MB)-2018

> NCLT judgment dated 2018-09-10. Citation: TCN-2018-NCLT-00791. Andhra Bank filed a Company Petition under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 10 Sept 2018
- **Citation:** TCN-2018-NCLT-00791
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/project-master-electricals-pvt-ltd-cp-ib-527-mb-2018-60827887

## Summary

### Background

Andhra Bank filed a Company Petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) against Project Master Electricals Pvt Ltd, the Corporate Debtor. The Corporate Debtor defaulted on repayment of ₹10,55,03,953. Andhra Bank repeatedly demanded repayment, but the account became NPA on 2016-12-29. Andhra Bank filed the petition to initiate the Insolvency Resolution Process.

## Facts

Andhra Bank filed a petition against Project Master Electricals Pvt Ltd under Section 7 of the IBC, 2016, due to a default in repayment of ₹10,55,03,953. The Corporate Debtor's account was declared NPA on 2016-12-29. Andhra Bank had granted the Corporate Debtor various credit facilities, including Open Cash Credit of ₹9,00,00,000, a sub-limit against book debts of ₹4,50,00,000, a Letter of Credit of ₹3,00,00,000, and a Bank Guarantee of ₹3,00,00,000. The Corporate Debtor executed various documents on 2015-11-07, including a Demand Promissory Note, Composite Agreement, Counter Guarantee, and Confirmation Letter for mortgage creation. The Petitioner issued a notice under Section 13(2) of the SARFAESI Act on 2017-01-03. The Petitioner also filed a CIBIL Report dated

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor defaulted in making repayment to the Petitioner, justifying the …

**Ratio:** Section 7 of the IBC, 2016 allows a financial creditor to initiate corporate insolvency

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**Reasoning:** The court observed that the Corporate Debtor availed the loan facility and defaulted in

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

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**Application:** The court applied Section 7 of the IBC to the facts of the case, noting that

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## Parties

- **Judges:** B.S.V. Prakash…; RavikumarDu…
- **Appellants:** Andhra…
- **Respondents:** Project Master…
- **Advocates:** Rohan B A…

## Timeline

- **2014-03-24 — Sanction Lette…**: Andhra Bank issued a sanction letter granting credit facilities to Project Master…
- **2014-04-22 — Charge Regi…**: The charge was registered with…

## 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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