# In the matter of CG Power Solutions Limited CP (IB) - 27-MB-2022

> NCLT judgment dated 2022-04-27. Citation: TCN-2022-NCLT-03035. CG Power and Industrial Solutions Limited (Petitioner) initiated Corporate Insolvency…

- **Court:** NCLT
- **Order date:** 27 Apr 2022
- **Citation:** TCN-2022-NCLT-03035
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/cg-power-solutions-limited-cp-ib-27-mb-2022-6c038d67

## Summary

### Background

CG Power and Industrial Solutions Limited (Petitioner) initiated Corporate Insolvency Resolution Process (CIRP) against CG Power Solutions Limited (Corporate Debtor) under Section 7 of the Insolvency and Bankruptcy Code, 2016, due to a default of Rs. 11,99,50,00,000. The Petitioner had extended various loans to the Corporate Debtor between March 2013 and April 2017, totaling Rs. 1333 Crores, through several loan agreements. The Corporate Debtor failed to repay the outstanding amount as of March 31, 2021. The Petitioner issued a demand notice on November 23, 2021. The Corporate Debtor is an unlisted public limited company incorporated on March 14, 2012. The Corporate Debtor has incurred consistent losses, and its current liabilities exceed its current assets by Rs.

…

## Facts

CG Power and Industrial Solutions Limited (the Petitioner), a holding company, sought to initiate Corporate Insolvency Resolution Process (CIRP) against its wholly-owned subsidiary, CG Power Solutions Limited (the Corporate Debtor), under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC). The basis for the application was a default of Rs. 11,99,50,00,000. The Petitioner had extended various loans to the Corporate Debtor between March 2013 and April 2017, totaling Rs. 1333 Crores, through several loan agreements. The Corporate Debtor failed to repay the outstanding amount as of March 31, 2021. A demand notice was issued by the Petitioner on November 23, 2021. The Corporate Debtor is an unlisted public limited company incorporated on March 14, 2012. The

…

## Issues and analysis

### Issue 1: Whether the holding company can initiate CIRP against its wholly owned subsidiary under the I&B …

**Ratio:** A shareholder, director, or promoter can also be a financial creditor when they make

…

**Reasoning:** The court relied on several judgments, including Urban Infrastructure Trustee Ltd. vs.

…

**Interpretation:** The definitions of “Financial Creditor” and “Financial Debt” given under

…

**Application:** The court applied the ratio to the facts of the case, noting that the

…

## Parties

- **Judges:** SUCHITRA KANUPARTH…; ANURADHA SANJAY…; +1 more
- **Appellants:** CG Power and…
- **Respondents:** CG POWER SOLUTIONS…
- **Advocates:** Ashish…; Adarsh S…; +3 more

## Timeline

- **2012-03-14 — Corporate Debtor…**: CG Power Solutions Limited incorporated…
- **2013-03-01 — Loan Agre…**: The Petitioner extended various loans to the Corporate Debtor between March 2013 and…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(7) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/cg-power-solutions-limited-cp-ib-27-mb-2022-6c038d67