# In the matter of Quantum Ltd. CP No. 1043-NCLT-MAH-2017

> NCLT judgment dated 2017-05-29. Citation: TCN-2017-NCLT-00844. Indus Finance Ltd., acting as a Financial Creditor, filed a petition before the NCLT under…

- **Court:** NCLT
- **Order date:** 29 May 2017
- **Citation:** TCN-2017-NCLT-00844
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/quantum-ltd-cp-no-1043-nclt-mah-2017-0b651ed8

## Summary

### Background

Indus Finance Ltd., acting as a Financial Creditor, filed a petition before the NCLT under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against Quantum Ltd. The petition was based on a default in interest payments on a loan facility sanctioned to Quantum Ltd. The loan was disbursed in two tranches on June 20, 2011, and August 10, 2011, totaling Rs. 2 Crore. While the principal amount was repaid, the interest payments were defaulted, leading to the account being classified as NPA on March 31, 2013. Prior to this NCLT petition, J.M. Financial Asset Reconstruction Company Private Ltd. had already initiated recovery proceedings against Quantum Ltd. before the Debt Recovery Tribunal (DRT),

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## Facts

Indus Finance Ltd. sanctioned a term loan facility to Quantum Ltd. vide sanction letter No.IFCL/QL/007/11-12 dated 2011-06-15. A sum of Rs.1,00,00,000/- was disbursed on 2011-06-20 and a further amount of Rs.1,00,00,000/- disbursed on 2011-08-10, totaling Rs.2,00,00,000/-. Quantum Ltd. serviced the interest on the debt regularly from 2011-02-26 to 2012-03-31. However, the payment of interest from 2012-04-01 to 2012-12-31 was irregular, and the account turned into NPA as on 2013-03-31. The amount in 'Default' is Rs.93,29,633/- which was treated as NPA as on 2013-03-31. Indus Finance Ltd. filed a petition before NCLT on 2017-05-25 on Form No.1 in the capacity of "Financial Creditor" to initiate Corporate Insolvency Resolution Process. J.M. Financial Asset

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## Issues and analysis

### Issue 1: Whether the petition under consideration is …

**Ratio:** Section 7 of the Insolvency and Bankruptcy Code (IBC) allows a financial creditor to

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**Reasoning:** The NCLT found that the conditions precedent for admitting the petition under the I&B

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

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**Application:** In this case, the NCLT found that Indus Finance Ltd. had established that

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## Parties

- **Judges:** M.K. Sh…
- **Appellants:** Indus Finan…
- **Respondents:** Quantum…

## Timeline

- **2011-06-15 — Sanction…**: Indus Finance Ltd. sanctioned a…
- **2011-06-20 — First Disbu…**: Rs.1,00,00,000/- was…

## 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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