# In the matter of ATS Infrastructure Limited

> NCLT judgment dated 2024-03-07. Citation: TCN-2024-NCLT-02173. Yes Bank Limited, the financial creditor, filed an application under Section 7 of the…

- **Court:** NCLT
- **Order date:** 7 Mar 2024
- **Citation:** TCN-2024-NCLT-02173
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/ats-infrastructure-limited-48e47074

## Summary

### Background

Yes Bank Limited, the financial creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against ATS Infrastructure Limited, the corporate debtor, due to alleged default on outstanding dues amounting to Rs. 7,77,48,929.08 along with applicable interest. The applicant claimed to have extended various loan facilities to the corporate debtor, including Term Loan (TL Facility), Dropline Overdraft Facility (OD Facility), and Funded Interest Term Loan (FITL Facility).

## Facts

Yes Bank Limited (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against ATS Infrastructure Limited (Corporate Debtor). The application was based on the Corporate Debtor's alleged default on outstanding dues of Rs. 7,77,48,929.08/-. Yes Bank had sanctioned various facilities to ATS Infrastructure, including Term Loan (TL Facility), Dropline Overdraft Facility (OD Facility), and Funded Interest Term Loan (FITL Facility). The Corporate Debtor defaulted on these facilities, with the first default occurring on 05.07.2022 for the TL Facility and 01.10.2021 for the OD Facility. ATS Infrastructure denied the allegations, claiming the sum was not a financial debt

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## Issues and analysis

### Issue 1: Whether the Applicant falls in the category of Financial Creditor as per Section 5(7) of the Code …

**Ratio:** A 'Financial Creditor' is defined under Section 5(7) of the Code as any person to whom a

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**Reasoning:** The NCLT perused the various facilities, including Term Loan, Dropline Overdraft, and

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**Interpretation:** The interpretation of Section 5(7) requires that a financial debt must be owed

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**Application:** In this case, the NCLT found no evidence that a financial debt, as defined

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## Parties

- **Judges:** BACHU VENKAT…; ATUL CHAT…
- **Appellants:** Yes Bank L…
- **Respondents:** ATS INFRASTRUCTURE…; M/s. ATS INFRASTRU…
- **Advocates:** V. Anush…; Pradyuman…; +2 more

## Timeline

- **2016-03-31 — Sanction…**: Sanction Letter Ref. No.…
- **2017-03-10 — Addendum Facili…**: Addendum Facility Letter Ref.…

## 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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