# In the matter of Delco Infrastructure Projects Limited

> NCLT judgment dated 2023-10-19. Citation: TCN-2023-NCLT-01087. 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-01087
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/delco-infrastructure-projects-limited-607412af

## 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, citing a default of Rs. 7,60,78,877/- as of 31.12.2022. The petition arises from multiple loan agreements between Intec Capital and Delco Infrastructure, where Delco allegedly defaulted on repayments. An earlier CIRP initiated by Intec Capital against Delco was withdrawn following a settlement agreement. However, Delco allegedly defaulted on the settlement terms, leading Intec to file the present petition.

## 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) due to a default of Rs. 7,60,78,877/- as of 31.12.2022. The default stems from multiple loan agreements. Delco availed a loan of Rs. 46,28,000/- in 2016, followed by another loan of Rs. 1,07,47,161/- and a third loan of Rs. 2,00,00,000/-. Delco defaulted on repayments, leading Intec to issue notices of recall in 2019 and initiate arbitration proceedings, which resulted in an award in favor of Intec. An earlier CIRP application filed by Intec was admitted on 20.06.2022, but later withdrawn on 06.07.2022, following a settlement

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## Issues and analysis

### Issue 1: Whether the breach of a settlement agreement, to which the Corporate Debtor is not a party, can …

**Ratio:** The principle is that a settlement agreement binds only the parties to it. If the

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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 case interprets Section 7 of the IBC in conjunction with the principles of

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**Application:** In this case, the ratio is applied to the fact that the settlement agreement

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## Parties

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

## Timeline

- **2016-02-29 — Loan Agreement…**: Corporate Debtor executed Loan…
- **2016-06-29 — Application for Fresh…**: 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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