# In the matter of Adilabad Expressway Pvt. Ltd.

> NCLT judgment dated 2023-12-21. Citation: TCN-2023-NCLT-00100. Indian Overseas Bank filed a Company Petition (IB/39/2021) under Section 7 of the Insolvency…

- **Court:** NCLT
- **Order date:** 21 Dec 2023
- **Citation:** TCN-2023-NCLT-00100
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/adilabad-expressway-pvt-ltd-7cdd525e

## Summary

### Background

Indian Overseas Bank filed a Company Petition (IB/39/2021) under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, against Adilabad Expressway Pvt Ltd, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) due to non-payment of a debt amounting to Rs. 89.77 Crores. The Corporate Debtor is a concessionaire for the Adilabad Expressway Project, an annuity-based Built-Operate-Transfer (BOT) project of the National Highway Authority of India (NHAI). The Corporate Debtor's debt servicing ability was allegedly impacted due to the Applicant's refusal to adhere to the rules of consortium banking and the agreement reached by all the consortium lenders in the Lenders consortium. The Corporate Debtor argued that the Applicant Bank was part of a Joint

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## Facts

Indian Overseas Bank (IOB), the Financial Creditor, filed a petition under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, against Adilabad Expressway Pvt Ltd, the Corporate Debtor, seeking to initiate the Corporate Insolvency Resolution Process (CIRP). The claim was based on an alleged default of Rs. 89.77 Crores. The Corporate Debtor is a concessionaire for the Adilabad Expressway Project, an annuity-based Built-Operate-Transfer (BOT) project of the National Highway Authority of India (NHAI). The Corporate Debtor argued that its debt servicing ability was impacted due to the Applicant's refusal to adhere to the rules of consortium banking and the agreement reached by all the consortium lenders in the Lenders consortium. The Corporate Debtor was part of a

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## Issues and analysis

### Issue 1: Whether it is mandatory for the petitioner to follow the procedure set out in Clause 7.4 of …

**Ratio:** The ratio is based on the principle that when a financial creditor is part of a Joint

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**Reasoning:** The court reasoned that the Inter-Creditor Agreement and Security Trustee Agreement were

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**Interpretation:** The interpretation is that the provisions of the Inter-Creditor Agreement and

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**Application:** In this case, the court found that the Applicant Bank (Indian Overseas Bank)

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## Parties

- **Judges:** Venkata Ramakrishn…; SH. CHARAN…
- **Appellants:** Indian Overseas…
- **Respondents:** Adilabad Expresswa…; M/s. Adilabad…
- **Advocates:** Alluri Krishna…; D A Suryanarayana…; +1 more

## Timeline

- **2021-01-01 — Company Petiti…**: Company Petition IB/39/2021 filed…
- **2006-10-13 — Corporate Debtor…**: Adilabad Expressway Pvt Ltd incorporated with authorized share capital of Rs.…

## 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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