# In the matter of VIL LImited Company Petition No. (IB)-1581(PB)-2018

> NCLT judgment dated 2019-03-19. Citation: TCN-2019-NCLT-04384. ICICI Bank Limited filed an application under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 19 Mar 2019
- **Citation:** TCN-2019-NCLT-04384
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/vil-limited-company-petition-no-ib-1581pb-2018-0c63c280

## Summary

### Background

ICICI Bank Limited filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against VIL Limited, the corporate debtor. The application was based on the corporate debtor's default in repaying working capital facilities extended by ICICI Bank. The corporate debtor argued that there was no financial debt as defined under Section 5(8) of the IBC, 2016, and that the company was solvent. The applicant bank claimed total outstanding dues of around INR 463 million.

## Facts

ICICI Bank Limited extended working capital facilities to VIL Limited, the corporate debtor, through various credit arrangement letters and master facility agreements. The facilities were enhanced over time, reaching INR 800.0 million, including an overdraft facility. The corporate debtor started defaulting on payments from May 2017. The account was classified as a Non-Performing Asset (NPA) on 30 September 2017. The total amount of default was Rs. 46,28,29,952.44/- as on 30.09.2018. The applicant filed copies of loan agreements, guarantee deeds, and other relevant documents. The corporate debtor argued that there was no financial debt and that the company was solvent due to inter-se fight and disagreement between the lenders. The applicant bank claimed total

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## Issues and analysis

### Issue 1: Whether there exists a 'Financial Debt' as …

**Ratio:** A 'Financial Debt' is defined in Section 5(8) of the IBC as a debt along with interest,

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**Reasoning:** The Adjudicating Authority reasoned that the loan amount was sanctioned and disbursed by

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**Interpretation:** The interpretation of 'Financial Debt' under Section 5(8) of the IBC requires

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**Application:** In this case, the Adjudicating Authority found that the loan amount was

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## Parties

- **Judges:** M. M. K…; S. K. MOH…
- **Appellants:** ICICI Bank…
- **Respondents:** VIL Lim…

## Timeline

- **2004-06-29 — Credit Arrangement…**: ICICI Bank extended working capital facilities amounting to INR 80.0 million to VIL…
- **2004-07-23 — Credit Facility…**: A credit facility agreement was entered into between ICICI Bank and VIL Limited with…

## 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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