# In the matter of SVL Ltd. CP-604-(IB)-CB-2018

> NCLT judgment dated 2018-09-10. Citation: TCN-2018-NCLT-00795. The case involves a petition filed by M/s.BMD Private Limited (Financial Creditor) against M/s.…

- **Court:** NCLT
- **Order date:** 10 Sept 2018
- **Citation:** TCN-2018-NCLT-00795
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/svl-ltd-cp-604-ib-cb-2018-70c6d5ea

## Summary

### Background

The case involves a petition filed by M/s.BMD Private Limited (Financial Creditor) against M/s. SVL Limited (Corporate Debtor) under Section 7 of the Insolvency and Bankruptcy Code, 2016. The matter pertains to a term sheet executed between the Financial Creditor (FC) and Leitwind Shriram Manufacturing Private Limited (LSML), a subsidiary of the Corporate Debtor, for setting up a 12 MW wind farm. The FC had released funds to LSML against an advance bank guarantee. Subsequently, the parties decided not to continue with the contract, and LSML agreed to refund the sums received. The Corporate Debtor executed a corporate guarantee in favor of the FC. When LSML failed to refund the amount, the FC invoked the corporate guarantee and filed a petition under Section 7 of the

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## Facts

M/s.BMD Private Limited (Financial Creditor) filed a petition against M/s. SVL Limited (Corporate Debtor) under Section 7 of the IBC, 2016. The Corporate Debtor is a public limited investment company. M/s.BMD Renewable Energy Private Limited, a private company, is a wholly-owned subsidiary of the Financial Creditor. Leitwind Shriram Manufacturing Private Limited (LSML) is a subsidiary of the Corporate Debtor. The FC and LSML executed a term sheet on 04.09.2015 for setting up a 12 MW wind farm. The FC released INR 5,97,00,000 to LSML on 30.12.2015 against an advance bank guarantee. BMD Renewable remitted INR 2,81,18,000 to LSML on 15.02.2016. The parties mutually decided not to continue with the contract, and LSML agreed to refund the sums received. LSML was liable to

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## Issues and analysis

### Issue 1: Whether the Applicant is a financial creditor as defined under the Insolvency and Bankruptcy Code, …

**Ratio:** A financial creditor is defined as a person to whom a financial debt is owed and includes

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**Reasoning:** The Tribunal considered the transaction between the Applicant and LSML, the termination

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**Interpretation:** The definition of 'financial creditor' under the IBC encompasses entities to

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**Application:** The Tribunal determined that the Applicant, by virtue of the Corporate

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## Parties

- **Judges:** K. Anantha…; S. VIJAYARA…
- **Appellants:** M/s.BMD PRIVATE…
- **Respondents:** M/s. SVL L…

## Timeline

- **2015-09-04 — Term Sheet Ex…**: The FC and LSML executed a term sheet…
- **2015-12-30 — Fund Rel…**: The FC released INR 5,97,00,000 to LSML…

## 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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