# In the matter of Delco Infrastructure Projects Limited

> NCLT judgment dated 2023-10-19. Citation: TCN-2023-NCLT-01098. Intec Capital Limited filed a petition under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 19 Oct 2023
- **Citation:** TCN-2023-NCLT-01098
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/delco-infrastructure-projects-limited-327baf0e

## Summary

### Background

Intec Capital Limited filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Delco Infrastructure Projects Limited, the Corporate Debtor, due to defaults in loan repayments. The Corporate Debtor had availed multiple loan facilities from Intec Capital, and despite entering into a settlement agreement, defaults persisted. An earlier CIRP initiated against Delco Infrastructure Projects Limited was withdrawn based on a settlement agreement, which was later breached. The applicant filed an application under Section 7 of IBC, 2016 before the NCLT.

## Facts

Intec Capital Limited (Financial Creditor) filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Delco Infrastructure Projects Limited (Corporate Debtor). The Corporate Debtor had availed multiple loan facilities from the Financial Creditor. The first loan was for Rs. 46,28,000, disbursed on 29.02.2016, with a repayment schedule of 48 monthly installments at 20% interest. The second loan was for Rs. 1,07,47,161, disbursed on 30.09.2016, also with a 48-month repayment schedule at 20% interest. The third loan was for Rs. 2,00,00,000, disbursed on 29.11.2016, with an 84-month repayment schedule at 18% interest. The Corporate Debtor defaulted on repayments, leading to dishonored

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority can initiate CIRP against the Corporate Debtor based on the …

**Ratio:** A settlement agreement is binding only on the parties to the agreement. A corporate

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**Reasoning:** The Adjudicating Authority reasoned that the Corporate Debtor was not a party to the

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**Interpretation:** This interpretation emphasizes the principle of privity of contract, which

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**Application:** The Adjudicating Authority applied this principle to the facts of the case,

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## Parties

- **Judges:** MANNI SANKARIAH…; BINOD KUMAR…
- **Appellants:** Intec Capital…
- **Respondents:** Delco Infrastructu…

## Timeline

- **2016-02-29 — First Loan Ag…**: Corporate Debtor executed Loan…
- **2016-06-29 — Second Loan Ap…**: Corporate Debtor approached the applicant for…

## 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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