# In the matter of Provogue (India) Limited CP (IB) -1667-I&BP-MB-2018

> NCLT judgment dated 2018-07-25. Citation: TCN-2018-NCLT-01075. Andhra Bank initiated Corporate Insolvency Resolution Process (CIRP) against Provogue (India)…

- **Court:** NCLT
- **Order date:** 25 Jul 2018
- **Citation:** TCN-2018-NCLT-01075
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/provogue-india-limited-cp-ib-1667-ibp-mb-2018-94915e77

## Summary

### Background

Andhra Bank initiated Corporate Insolvency Resolution Process (CIRP) against Provogue (India) Limited, the Corporate Debtor, due to defaults in repayment of financial assistance. The default occurred from 2017-07-31 onwards. Andhra Bank sought to recover Rs. 86,67,06,572/- under Section 7 of the Insolvency and Bankruptcy Code, 2016. The Corporate Debtor had credit facilities from a consortium of lenders led by Andhra Bank since 2003. The Corporate Debtor executed a Composite Agreement dated 2015-11-02 in favor of Andhra Bank. The Corporate Debtor also executed an 11th Supplemental Joint Deed of Hypothecation dated 2017-07-24 in favor of the Consortium Banks for an amount not exceeding Rs. 166.53 crores. Andhra Bank issued a recall letter on 2018-03-31, demanding Rs.

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## Facts

Andhra Bank filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Provogue (India) Limited ('Corporate Debtor') due to defaults in repayment of financial assistance. The Corporate Debtor defaulted from 2017-07-31 onwards, owing Rs. 86,67,06,572/-. The Corporate Debtor had credit facilities from a consortium of lenders led by Andhra Bank since 2003. A Composite Agreement was executed on 2015-11-02. An 11th Supplemental Joint Deed of Hypothecation was executed on 2017-07-24 for Rs. 166.53 crores. Andhra Bank issued a recall letter on 2018-03-31, demanding Rs. 228.12 crores. The Corporate Debtor's legal manager accepted the debt and default. The petition was complete under Section 7(2).

## Issues and analysis

### Issue 1: Whether the Corporate Debtor defaulted in …

**Ratio:** A default occurs when a debtor fails to repay a debt when it becomes due and payable. The

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**Reasoning:** The Adjudicating Authority, upon reviewing the documents filed by Andhra Bank, found that

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**Interpretation:** The legal principle is that if a debtor defaults on its debt obligations, the

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**Application:** In this case, the Corporate Debtor's failure to repay the loan, coupled with

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## Parties

- **Judges:** Bhaskara Pantula…; V. Nallasen…
- **Appellants:** Andhra…
- **Respondents:** Provogue (India)…

## Timeline

- **2017-07-31 — Default Comme…**: Corporate Debtor committed default on 2017-07-31 onwards in repayment of financial…
- **2015-11-02 — Composite Ag…**: Corporate Debtor executed Composite…

## 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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