# In the matter of Shekhar Resorts Ltd. CP-IB-22-ND-2018

> NCLT judgment dated 2018-09-11. Citation: TCN-2018-NCLT-00784. Oriental Bank of Commerce filed an application under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 11 Sept 2018
- **Citation:** TCN-2018-NCLT-00784
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/shekhar-resorts-ltd-cp-ib-22-nd-2018-0c192fbb

## Summary

### Background

Oriental Bank of Commerce filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Shekhar Resorts Limited for non-payment of debt amounting to Rs. 19,67,64,134 including interest. Shekhar Resorts Limited (R1) had approached the bank for financial facilities to complete the construction of a five-star hotel/resort. The bank sanctioned a term loan, letter of credit, and bank guarantee. R1 utilized the facilities but became irregular in servicing the debt, leading the bank to declare the account as a non-performing asset (NPA) and recall the advance.

## Facts

Oriental Bank of Commerce (the Applicant) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Shekhar Resorts Limited (R1) for a debt of Rs. 19,67,64,134 including interest. R1 had approached the Applicant for financial facilities to construct a five-star hotel/resort. The Applicant sanctioned a term loan of Rs. 2,000 lakhs, a letter of credit of Rs. 400 lakhs, and a bank guarantee of Rs. 150 lakhs. R1 mortgaged the resort property measuring 49,974 sq. meters to secure the financial facilities. R1 utilized the financial facilities but became irregular in servicing the debt. The Applicant declared R1's account as a non-performing asset (NPA) on 2015-09-30 and recalled the

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## Issues and analysis

### Issue 1: Whether the Tribunal has the …

**Ratio:** Section 60 of the Insolvency and Bankruptcy Code states that the Adjudicating Authority,

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**Reasoning:** The tribunal reasoned that since the registered office of Shekhar Resorts Limited (R1) is

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**Interpretation:** Section 60 of the Code establishes the jurisdictional boundaries of the NCLT

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**Application:** Since the registered office of R1 is in Delhi, the NCLT in Delhi has the

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## Parties

- **Judges:** R. VARADH…; V.K. SUB…
- **Appellants:** Oriental Bank of…
- **Respondents:** Shekhar Resorts…; Shekhar Resorts…

## Timeline

- **2008-11-20 — Sanction of Financial…**: Oriental Bank of Commerce sanctioned financial facilities to Shekhar Resorts Limited,…
- **2015-09-30 — Account Decla…**: Oriental Bank of Commerce declared the account of Shekhar Resorts Limited as a…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60 — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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