# In the matter of Bellona Estate Developers Limited  CP (IB) No. 843-MB-IV-2021

> NCLT judgment dated 2023-05-19. Citation: TCN-2023-NCLT-03247. This case involves an application filed by Canara Bank, the Financial Creditor, under Section 7…

- **Court:** NCLT
- **Order date:** 19 May 2023
- **Citation:** TCN-2023-NCLT-03247
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/bellona-estate-developers-limited-cp-ib-no-843-mb-iv-2021-0b004ab0

## Summary

### Background

This case involves an application filed by Canara Bank, the Financial Creditor, under Section 7 of the Insolvency & Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Bellona Estate Developers Limited, the Corporate Debtor. The Financial Creditor claimed a default of Rs. 1,75,81,72,267.90 as of 31.05.2021, including Term Liability Plus Equity Exposure Liability as per SDR mechanism. The date of default was stated as 01.08.2015, based on the repayment schedule stipulated in the sanction letter dated 22.03.2014, 29.03.2014 and 07.08.2015. The Corporate Debtor is a limited company engaged in real estate development and had approached the Financial Creditor for financial assistance.

## Facts

Canara Bank (formerly Syndicate Bank) extended a Term Loan of Rs. 80 Crores to Bellona Estate Developers Limited on 22nd March 2014 under a Lease Rental Discounting facility, disbursed on 29th March 2014. A Composite Hypothecation Agreement was executed. The initial repayment was structured in 87 monthly installments from April 2015, later changed to August 2015, and further extended to April 2016. Extensions were conditional on a payment of Rs. 2,78,27,569.52, which the Corporate Debtor failed to make. On 29th March 2016, a First Supplemental Agreement, Shareholders Agreement, Inter Creditor Agreement, Debtor Creditor Agreement, and Undertaking were signed. The Financial Creditor issued a Demand Notice on 6th May 2019, followed by a SARFAESI Notice on 26th July 2019.

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## Issues and analysis

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

**Ratio:** Section 7 of the IBC allows a financial creditor to initiate CIRP against a corporate

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**Reasoning:** The NCLT found that the Financial Creditor had provided sufficient evidence to

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**Interpretation:** Section 7 of the IBC provides the mechanism for financial creditors to initiate

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**Application:** The NCLT applied Section 7 of the IBC to the facts of the case and found that

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## Parties

- **Judges:** Prabhat…; KISHORE VEMULAPALL…
- **Appellants:** Canara…
- **Respondents:** Bellona Estate…

## Timeline

- **2014-03-22 — Term Loan San…**: Syndicate Bank (merged with Canara Bank) sanctioned a Term Loan of Rs.80.00 Crores to the…
- **2014-03-29 — Loan Disb…**: The Term Loan of Rs.80.00 Crores was…

## 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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