# In the matter of RVR Marine Products Limited TCP (IB) No. 101-7-AMR-2019 in CP (IB) No. 320-7-HDB-2019

> NCLT judgment dated 2019-10-30. Citation: TCN-2019-NCLT-00777. IDBI Bank Limited filed an application under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 30 Oct 2019
- **Citation:** TCN-2019-NCLT-00777
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/rvr-marine-products-limited-tcp-ib-no-101-7-amr-2019-in-cp-ib-no-320-7-hdb-2019-66f0a88a

## Summary

### Background

IDBI Bank Limited filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against RVR Marine Products Ltd, alleging default in payment of a financial debt. RVR Marine Products Ltd had availed a working capital loan of Rs. 100 Crores from IDBI Bank, secured by immovable property and a guarantee agreement dated 22.03.2010. Due to the respondent's failure to repay the loan, the account was classified as a Non-Performing Asset (NPA) on 01.04.2014. IDBI Bank then moved OA No. 812/2015 before the Debt Recovery Tribunal-I (DRT-I) Hyderabad on 22.07.2015 for recovery of outstanding dues.

## Facts

IDBI Bank Limited extended a working capital loan of Rs. 100 Crores to RVR Marine Products Ltd. The loan was secured by immovable property and a Loan-cum-Hypothecation Agreement dated 22.03.2010. RVR Marine Products Ltd defaulted on the loan, leading to the account being classified as a Non-Performing Asset (NPA) on 01.04.2014. IDBI Bank initiated recovery proceedings before the Debt Recovery Tribunal-I (DRT-I) Hyderabad, filing OA No. 812/2015 on 22.07.2015, seeking recovery of Rs. 94,85,05,505.23. DRT-I Hyderabad allowed the application ex parte on 25.01.2017. RVR Marine Products Ltd contested the claim, stating that they were making payments of Rs. 5,00,000 per month as per the order of the Debt Recovery Appellate Tribunal (DRAT), Kolkata, and that IDBI Bank had

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016, is …

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

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**Reasoning:** The NCLT found that the financial debt was crystallized by the order dated 25.01.2017 of

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

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**Application:** The NCLT applied Section 7 to the facts, noting the existence of a financial

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## Parties

- **Judges:** Janab Mohammed…
- **Appellants:** IDBI Bank…
- **Respondents:** RVR Marine…

## Timeline

- **2010-03-22 — Loan-cum-Hypothecation…**: Loan-cum-Hypothecation Agreement was executed between IDBI Bank and RVR Marine Products…
- **2014-04-01 — Account Classified as…**: RVR Marine Products Ltd's account 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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