# In the matter of Gympac Fitness System Private Limited IBA-642-2020

> NCLT judgment dated 2022-07-01. Citation: TCN-2022-NCLT-04625. Axis Bank Limited filed an application under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 1 Jul 2022
- **Citation:** TCN-2022-NCLT-04625
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chennai/gympac-fitness-system-private-limited-iba-642-2020-49a9e05b

## Summary

### Background

Axis Bank Limited filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Gympac Fitness Systems Private Limited, seeking initiation of Corporate Insolvency Resolution Process (CIRP). The application was based on a financial debt arising from loan facilities granted by Axis Bank to Gympac Fitness Systems.

## Facts

Axis Bank Limited granted loan facilities to Gympac Fitness Systems Private Limited to enable the latter to execute a contracted supply of Gym Equipments to Talwalkars Better Value Fitness Limited.

The Financial Creditor sanctioned a facility of Rs 10,00,00,000/- to the Corporate Debtor on 06.10.2017.

The Corporate Debtor executed a Master Letter dated 09.10.2017, agreeing to raise a pro forma invoice upon TBVFL.

The date of default as mentioned in the application is 17.06.2019.

TBVFL failed to adhere to the repayment schedule, leading to a default.

A demand notice dated 13.08.2019 was issued recalling the entire facility.

The Corporate Debtor filed a civil suit before the Madras High Court seeking a mandatory injunction against the Financial Creditor.

…

## Issues and analysis

### Issue 1: Whether a financial debt exists as …

**Ratio:** The Adjudicating Authority determined that the debt disbursed by the Financial Creditor

…

**Reasoning:** The Corporate Debtor admitted to receiving Rs. 10,00,00,000/- from the Financial

…

**Interpretation:** The definition of 'financial debt' under Section 5(8)(1) includes a debt along

…

**Application:** The disbursed amount of Rs. 10,00,00,000/- along with the agreed interest

…

## Parties

- **Judges:** S. Ramath…; Anil Ku…
- **Appellants:** Axis Bank L…; AXIS…
- **Respondents:** Gympac Fitness…
- **Other parties:** Mukun…
- **Advocates:** V.V. Siva…; Mr.P.H.ArvindPandi…; +2 more

## Timeline

- **2017-10-06 — Sanction…**: Financial Creditor sanctioned a facility of Rs…
- **2017-10-09 — Master L…**: Corporate Debtor executed a Master Letter agreeing to raise a pro forma invoice upon…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(8) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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