# In the matter of Bilcare Limited CP (IB) 306-MB-2020

> NCLT judgment dated 2022-11-11. Citation: TCN-2022-NCLT-00468. The case involves a petition filed under Section 7 of the Insolvency and Bankruptcy Code, 2016…

- **Court:** NCLT
- **Order date:** 11 Nov 2022
- **Citation:** TCN-2022-NCLT-00468
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/bilcare-limited-cp-ib-306-mb-2020-cdab1da4

## Summary

### Background

The case involves a petition filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) by Assets Reconstruction Company (India) Limited (Assignee of South India Bank Limited) against Bilcare Limited, seeking to initiate Corporate Insolvency Resolution Process (CIRP). The Corporate Debtor, Bilcare Limited, was incorporated on 01.07.1987. The Financial Creditor's claim arises from a Standby Letter of Credit (SBLC) facility sanctioned to the Corporate Debtor by South Indian Bank, later assigned to Assets Reconstruction Company. The Corporate Debtor allegedly defaulted on repayment, leading to the petition. The Corporate Debtor raised objections, including arguments that the debt was settled, that a relief undertaking was in place, and regarding the authority

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## Facts

In October 2013, South Indian Bank sanctioned a Standby Letter of Credit (SBLC) facility of USD 21,700,000 to Bilcare Limited. A Credit Facility Agreement was executed on 09.10.2013, valid for 5 years with a bullet repayment. On 04.07.2018, South Indian Bank assigned the SBLC facility to Assets Reconstruction Company (India) Limited. The assignment was communicated to Bilcare Limited on 09.04.2017, and Bilcare acknowledged the outstanding dues on 17.04.2017. Bilcare Limited failed to repay the outstanding amount, leading Assets Reconstruction Company to issue a Recall Letter on 10.10.2018 for Rs. 187,00,21,252. Assets Reconstruction Company filed Company Petition No. 912/(MB)/2018 in February 2019. Consent Terms were executed on 26.09.2019, and the petition was

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor was in default of a …

**Ratio:** A 'default' means non-payment of debt when whole or any part or instalment of the amount

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**Reasoning:** The court found that the Corporate Debtor failed to make payments as per the agreed terms

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**Interpretation:** The interpretation of 'default' under Section 3(12) of the IBC requires the

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**Application:** The court applied the definition of 'default' to the facts, noting that Bilcare

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## Parties

- **Judges:** P.N. Des…; Shyam Babu…
- **Appellants:** Assets Reconstruct…
- **Respondents:** Bilcare L…

## Timeline

- **2013-10-01 — SBLC Facility S…**: South Indian Bank sanctioned a Standby Letter of Credit (SBLC) facility of USD 21,700,000…
- **2013-10-09 — Credit Facility…**: A Credit Facility Agreement was executed…

## 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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