# In the matter of Coastal Infrastructure Private Limited CP (IB) No. 21-7-AMR-2021

> NCLT judgment dated 2022-05-10. Citation: TCN-2022-NCLT-02797. Srivathsa Power Projects Private Limited, the Financial Creditor, filed an application under…

- **Court:** NCLT
- **Order date:** 10 May 2022
- **Citation:** TCN-2022-NCLT-02797
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/coastal-infrastructure-private-limited-cp-ib-no-21-7-amr-2021-a42f52db

## Summary

### Background

Srivathsa Power Projects Private Limited, the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of the Corporate Insolvency Resolution Process (CIRP) against Coastal Infrastructure Private Limited, the Corporate Debtor, alleging default in payment of dues. The Corporate Debtor had entered into an Inter-Corporate Deposit (ICD) Agreement with the Financial Creditor to obtain emergency funds. The Corporate Debtor availed a loan of Rs. 17.42 Crores but only repaid a part-amount of Rs. 1,50,000. The Corporate Debtor sought extensions for repayment but failed to repay the ICD amount. The Financial Creditor demanded repayment, even offering to accept only the interest amount of Rs. 5,79,61,133 relating to

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## Facts

On 31.07.2017, Coastal Infrastructure Private Limited (Corporate Debtor) entered into an Inter Corporate Deposit (ICD) Agreement with Srivathsa Power Projects Private Limited (Financial Creditor) for emergency funds. The Corporate Debtor availed a loan of Rs.17.42 Crores. The Corporate Debtor paid a part-amount of Rs.1,50,000 on 23.06.2019, with no further repayment. The Corporate Debtor sought three extensions for repayment until 30.09.2011 and later until 31.12.2011, but failed to repay. The Financial Creditor demanded repayment from 31.12.2011. The Financial Creditor offered to accept only the interest of Rs.5,79,61,133 relating to the period from the Financial Year 2007-08 to 2011-12. The Corporate Debtor stopped reflecting the interest amount in its books after

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor committed a default …

**Ratio:** The legal principle applied is that if a corporate debtor defaults in paying its debt to

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**Reasoning:** The court reasoned that the Corporate Debtor had availed a loan from the Financial

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**Interpretation:** This issue involves the interpretation of Section 7 of the IBC, which allows a

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

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## Parties

- **Judges:** TELAPROLU…
- **Appellants:** Srivathsa Power…
- **Respondents:** Coastal Infrastruc…; Coastal Infrastruc…

## Timeline

- **2017-07-31 — ICD Agre…**: Corporate Debtor entered into Inter Corporate Deposit (ICD) Agreement with Financial…
- **2019-06-23 — Partial Rep…**: Corporate Debtor paid a part-amount of…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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