# In the matter of Venkateshwara Capital management Limited CP(IB)No.1096-KB-2018

> NCLT judgment dated 2019-03-05. Citation: TCN-2019-NCLT-04587. The case involves an application filed by Religare Finvest Limited, the Financial Creditor,…

- **Court:** NCLT
- **Order date:** 5 Mar 2019
- **Citation:** TCN-2019-NCLT-04587
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/venkateshwara-capital-management-limited-cpibno1096-kb-2018-115c99cb

## Summary

### Background

The case involves an application filed by Religare Finvest Limited, the Financial Creditor, under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against Venkateshwara Capital Management Limited, the Corporate Debtor. The Financial Creditor claimed that the Corporate Debtor defaulted in paying a debt of Rs. 22,97,82,021/-. The Corporate Debtor failed to repay the loan as agreed, even after the loan amount was enhanced and the facility was renewed. The Financial Creditor then filed this application after the Corporate Debtor failed to comply with a letter demanding clearance of the outstanding loan amount.

## Facts

Religare Finvest Limited (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Venkateshwara Capital Management Limited (Corporate Debtor) due to a default in payment of debt amounting to Rs. 22,97,82,021/-. A Loan against Securities Agreement was executed on 2008-06-23, where the Financial Creditor sanctioned and disbursed a loan of Rs. 8,00,00,000/- to the Corporate Debtor. The Corporate Debtor failed to repay the loan in agreed monthly installments. Upon the Corporate Debtor's request, the loan amount was enhanced to Rs. 10,00,00,000/- on 2011-04-05, and the facility was renewed until 2014-07-25. A condition precedent for the renewed facility was that the Corporate Debtor would pay installments as agreed,

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## Issues and analysis

### Issue 1: Whether the Financial Creditor established the existence of a 'financial debt' due and payable by …

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

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**Reasoning:** The court reviewed the documents provided by the Financial Creditor, including the Loan

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**Interpretation:** The term 'financial debt' is interpreted to include any debt along with

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**Application:** The court applied the ratio to the facts by noting that the loan agreement and

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## Parties

- **Judges:** Madan B.…
- **Appellants:** Religare Finvest…
- **Respondents:** Venkateshwara…

## Timeline

- **2008-06-23 — Loan Agre…**: Loan against Securities Agreement dated 2008-06-23, the Financial Creditor sanctioned and…
- **2011-04-05 — Loan Enhan…**: The loan amount was enhanced to Rs. 10,00,00,000/- vide letter for enhancement of…

## 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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