# In the matter of Xenitis Infotech Limited CP (IB) No. 1233-KB-2018

> NCLT judgment dated 2020-03-19. Citation: TCN-2020-NCLT-01452. UCO Bank, a financial creditor, filed an application under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 19 Mar 2020
- **Citation:** TCN-2020-NCLT-01452
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/xenitis-infotech-limited-cp-ib-no-1233-kb-2018-0a3928c6

## Summary

### Background

UCO Bank, a financial creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Xenitis Infotech Ltd., the corporate debtor, for initiation of the Corporate Insolvency Resolution Process (CIRP). The application was based on the corporate debtor's alleged default in repayment of credit facilities availed from the consortium bank. The corporate debtor contested the application, raising objections regarding the maintainability of the application, limitation, and the authority of the signatory.

## Facts

UCO Bank, acting as the lead bank and financial creditor, initiated proceedings against Xenitis Infotech Ltd., the corporate debtor, under Section 7 of the Insolvency and Bankruptcy Code, 2016. Xenitis Infotech had availed various credit facilities from a consortium of banks, including UCO Bank, amounting to Rs. 428.52 Crores. The corporate debtor defaulted on repayments, leading UCO Bank to issue a demand notice and initiate recovery proceedings before the Debts Recovery Tribunal. The account was classified as a Non-Performing Asset (NPA) on 06.03.2010. Several restructuring agreements were executed, and the corporate debtor acknowledged the debt on multiple occasions. However, UCO Bank independently filed the application for CIRP, despite being a member of the Joint

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor is maintainable under Section 7 of the …

**Ratio:** The Hon'ble Supreme Court has clearly observed that an action taken on the basis of the

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**Reasoning:** The court considered the objection that the application was based on a circular that had

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**Interpretation:** The interpretation of the Supreme Court's ruling on the circular is that any

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**Application:** The court applied this principle to the case, finding that the application, to

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## Parties

- **Judges:** Shree Jina…
- **Appellants:** UCO B…
- **Respondents:** Xenitis Infotech…

## Timeline

- **2010-03-06 — Account Decla…**: The account of Xenitis Infotech Ltd. was…
- **2012-05-29 — Master Restructuring…**: A Master Restructuring Agreement was entered into between UCO Bank and Xenitis Infotech…

## 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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