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

> NCLT judgment dated 2022-04-27. Citation: TCN-2022-NCLT-03048. CG Power and Industrial Solutions Limited (Petitioner) initiated Corporate Insolvency…

- **Court:** NCLT
- **Order date:** 27 Apr 2022
- **Citation:** TCN-2022-NCLT-03048
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/cg-power-solutions-limited-cp-ib-27-mb-2022-72583ce4

## 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, citing 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 on November 23, 2021. The Corporate Debtor is an unlisted public limited company incorporated on March 14, 2012. The Corporate Debtor's current liabilities exceeded its current assets by Rs. 18,69,94,23,046 as of March 31, 2021, and its net

…

## Facts

CG Power and Industrial Solutions Limited (the Petitioner), being the 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 Petitioner claimed that the Corporate Debtor had defaulted on a debt 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 on November 23, 2021. The Corporate Debtor is an unlisted public limited company incorporated on March

…

## Issues and analysis

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

**Ratio:** There is no legal impediment or bar under the Code that prevents a holding company from

…

**Reasoning:** The court relied on the fact that the Corporate Debtor had defaulted in repayment of its

…

**Interpretation:** The court interpreted the provisions of the I&B Code to allow a holding

…

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

…

## Parties

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

## Timeline

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

## 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-2022-72583ce4