# In the matter of Venta Realtech Pvt. Ltd. (IB)-923(ND)-2019

> NCLT judgment dated 2019-05-20. Citation: TCN-2019-NCLT-03259. The Oriental Bank of Commerce filed a petition under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 20 May 2019
- **Citation:** TCN-2019-NCLT-03259
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/venta-realtech-pvt-ltd-ib-923nd-2019-138c9d19

## Summary

### Background

The Oriental Bank of Commerce filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Venta Realtech Pvt. Ltd. The bank sought to initiate the Corporate Insolvency Resolution Process (CIRP) due to the corporate debtor's failure to repay a term loan of Rs. 90 crores sanctioned on 2014-07-01. The corporate debtor's account was declared a Non-Performing Asset (NPA) on 2017-10-16, and a recall notice was issued on 2018-01-03 under Section 13(2) of the SARFAESI Act. The bank claimed an outstanding due of Rs. 87,88,72,970.

## Facts

Oriental Bank of Commerce sanctioned a term loan of Rs. 90 crores to Venta Realtech Pvt. Ltd. on 2014-07-01 to meet the company's financial needs for real estate development. Venta Realtech executed loan documents and confirmed the outstanding balance periodically. However, Venta Realtech failed to maintain financial discipline, leading to its loan account being declared a Non-Performing Asset (NPA) on 2017-10-16. The bank issued a recall notice on 2018-01-03 under Section 13(2) of the SARFAESI Act, claiming Rs. 87,88,72,970 as due. Venta Realtech argued that the IBC petition was forum shopping due to pending DRT proceedings and the availability of SARFAESI remedies. The bank argued that the company's admitted inability to repay the loan entitled them to initiate CIRP.

## Issues and analysis

### Issue 1: Whether the petition filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, by Oriental …

**Ratio:** Section 7 of the IBC allows a financial creditor to initiate CIRP against a corporate

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**Reasoning:** The court reasoned that the corporate debtor admitted to availing the loan, executing

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**Interpretation:** Section 7 provides a mechanism for financial creditors to recover debts from

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**Application:** The court applied Section 7 to the facts, noting the corporate debtor's

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## Parties

- **Judges:** Ina Mal…; V.K. SUB…
- **Appellants:** Oriental Bank of…
- **Respondents:** Venta Realtech…
- **Advocates:** S. K. S…; Kshitij V…

## Timeline

- **2014-07-01 — Loan Sanc…**: Oriental Bank of Commerce sanctioned a term loan of Rs. 90 crores to Venta Realtech Pvt.…
- **2017-10-16 — Account Decla…**: Venta Realtech Pvt. Ltd.'s loan 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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