# In the matter of Visa Drugs & Pharmaceuticals Private Limited C.P. (IB) No. 1239-KB-2018

> NCLT judgment dated 2019-11-08. Citation: TCN-2019-NCLT-00655. This case involves a joint petition filed by Syndicate Bank and Union Bank of India under…

- **Court:** NCLT
- **Order date:** 8 Nov 2019
- **Citation:** TCN-2019-NCLT-00655
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/visa-drugs-pharmaceuticals-private-limited-cp-ib-no-1239-kb-2018-27ab1dc6

## Summary

### Background

This case involves a joint petition filed by Syndicate Bank and Union Bank of India under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against M/s. Visa Drugs and Pharmaceuticals Private Limited, the Corporate Debtor. The Financial Creditors allege that the Corporate Debtor defaulted on its obligations towards them, leading to outstanding dues. The Corporate Debtor, engaged in manufacturing medicines, had approached the Financial Creditors in 2016 for various credit facilities. Agreements were entered into, but the Corporate Debtor failed to perform its obligations. The Financial Creditors issued a notice to the Corporate Debtor to repay the outstanding amount, but the Corporate Debtor

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## Facts

M/s. Syndicate Bank and M/s. Union Bank of India, acting as Financial Creditors, jointly filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s. Visa Drugs and Pharmaceuticals Private Limited, the Corporate Debtor. The Corporate Debtor, a company engaged in the business of manufacturing medicines, had approached the Financial Creditors in 2016 for sanctioning an overdraft facility, cash credit facility, term loan, and bank guarantee. The Directors of the Corporate Debtor made representations about the potential and stability of the business, based on which the Financial Creditors sanctioned the facilities. Various agreements were entered into on 12th August, 2016, including a

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditors under Section 7 of the Insolvency & …

**Ratio:** Section 7(1) of the Insolvency and Bankruptcy Code, 2016, permits a financial creditor,

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**Reasoning:** The Tribunal considered the submissions made by both parties and examined the documents

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**Interpretation:** Section 7 of the IBC allows financial creditors to initiate CIRP upon the

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**Application:** The Tribunal applied Section 7(1) of the IBC to the facts of the case and found

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## Parties

- **Judges:** Jinan…; Harish Chander…
- **Appellants:** Syndicate…
- **Respondents:** Visa Drugs and…; Visa Drugs and…

## Timeline

- **2016-01-01 — Corporate Debtor…**: The Corporate Debtor approached the Financial Creditors for sanctioning an overdraft…
- **2016-08-12 — Agreements Ent…**: The Financial Creditors and the Corporate Debtor entered into various agreements,…

## 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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