# In the matter of RCM Infrastructure Limited IA 504 and 688-2018 In CP (IB) No. 601-10-HDB-2018 and CP (IB) No.601-10-HDB-2018

> NCLT judgment dated 2019-01-03. Citation: TCN-2019-NCLT-05333. The case involves an application filed under Section 10 of the Insolvency and Bankruptcy Code…

- **Court:** NCLT
- **Order date:** 3 Jan 2019
- **Citation:** TCN-2019-NCLT-05333
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/rcm-infrastructure-limited-ia-504-and-688-2018-in-cp-ib-no-601-10-hdb-2018-and-c-edc0f9df

## Summary

### Background

The case involves an application filed under Section 10 of the Insolvency and Bankruptcy Code (IBC), 2016, by RCM Infrastructure Limited (Corporate Debtor) to initiate the Corporate Insolvency Resolution Process (CIRP). The application was triggered by defaults in repayment of loans borrowed from various financial creditors, including Andhra Bank and Indian Overseas Bank. The Corporate Debtor cited economic slowdown, delayed realization of receivables, and project hindrances as reasons for the defaults. The financial creditors opposed the application, alleging that it was filed to stall recovery proceedings initiated under the SARFAESI Act.

## Facts

RCM Infrastructure Limited, the Corporate Debtor, filed a petition under Section 10 of the IBC to initiate CIRP due to defaults in loan repayments to financial creditors like Andhra Bank and Indian Overseas Bank. The Corporate Debtor attributed the defaults to economic slowdown, delayed receivables, and project hindrances, leading to invocation of bank guarantees. The total debt in default was reported as Rs. 194,96,56,434. Andhra Bank and Indian Overseas Bank classified the Corporate Debtor's accounts as Non-Performing Assets (NPA) and initiated recovery proceedings under the SARFAESI Act. The Corporate Debtor also filed SA No.371/2018 before DRT-II, Hyderabad, challenging the SARFAESI proceedings. Indian Overseas Bank also filed IA 688 seeking directions to the

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor met the conditions for initiating CIRP under Section 10 of the IBC, …

**Ratio:** Section 10 of the IBC allows a corporate debtor to initiate CIRP if it has committed a

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**Reasoning:** The Adjudicating Authority found that the Corporate Debtor had defaulted on its loan

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**Interpretation:** Section 10 provides a mechanism for a corporate debtor facing financial

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**Application:** The Adjudicating Authority applied the provisions of Section 10 to the facts of

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## Parties

- **Judges:** Ratakonda…; Ratakonda…
- **Respondents:** RCM INFRA…; Andhra…

## Timeline

- **2018-10-15 — Corporate Debtor's…**: According to its books of account, the Corporate Debtor owes a sum of Rs. 227.18 Cr to…
- **2018-10-24 — Sale Notic…**: Sale notice dated 24.09.2018 fixing…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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