# In the matter of Ultra Home Construction Pvt. Ltd. CP No. (IB)-122 (PB)-2017

> NCLT judgment dated 2017-10-04. Citation: TCN-2017-NCLT-00321. Bank of Baroda, the financial creditor, filed an application under Section 7 of the Insolvency…

- **Court:** NCLT
- **Order date:** 4 Oct 2017
- **Citation:** TCN-2017-NCLT-00321
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/ultra-home-construction-pvt-ltd-cp-no-ib-122-pb-2017-8f0e46c3

## Summary

### Background

Bank of Baroda, the financial creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against Ultra Home Construction Private Limited, the corporate debtor. The application was filed due to a default on a common loan agreement executed between the corporate debtor and a consortium of banks, including Bank of Baroda, Bank of India, Oriental Bank of Commerce, Punjab National Bank, and Union Bank of India. The corporate debtor opposed the admission of the application, raising objections regarding the authority of the applicant and discrepancies in the default amount. The Greater Noida Industrial Development Authority also filed an application for intervention.

## Facts

Bank of Baroda, acting as the 'Financial Creditor', initiated proceedings under Section 7 of the Insolvency and Bankruptcy Code, 2016, against 'Ultra Home Construction Private Limited', the 'Corporate Debtor', due to defaults on a loan facility. A common loan agreement dated 06.01.2010 was executed between the Corporate Debtor and a consortium of banks, including Bank of Baroda, Bank of India, Oriental Bank of Commerce, Punjab National Bank, and Union Bank of India. The Bank of Baroda sanctioned a term loan of Rs. 75,00,00,000 to the Corporate Debtor, out of which Rs. 65,84,00,000 was disbursed. The Corporate Debtor defaulted on the loan, with the principal amount in default claimed to be Rs. 31,92,31,627 as of 30.04.2017, along with overdue and penal interest

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## Issues and analysis

### Issue 1: Whether the application filed by Bank of Baroda under Section 7 of the Insolvency and Bankruptcy …

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

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**Reasoning:** The court reasoned that the explanation to Section 7(1) clarifies that a default includes

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

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**Application:** The court applied Section 7 to the facts, finding that Bank of Baroda, as a

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## Parties

- **Judges:** M. M. K…; DeepaKr…
- **Appellants:** Bank of B…
- **Respondents:** Ultra Home…

## Timeline

- **2010-01-06 — Common Loan A…**: A common loan agreement was executed between the Corporate Debtor and a consortium of…
- **2010-01-15 — Memorandum o…**: A copy of the memorandum of entry dated January 15, 2010 (the "Memorandum of Entry") in…

## 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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