# In the matter of Digital Ventures Private Limited

> NCLT judgment dated 2024-11-19. Citation: TCN-2024-NCLT-00203. Axis Bank Limited filed a Company Petition (CP (IB) No. 1065/MB/2023) under Section 7 of the…

- **Court:** NCLT
- **Order date:** 19 Nov 2024
- **Citation:** TCN-2024-NCLT-00203
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/digital-ventures-private-limited-61c33665

## Summary

### Background

Axis Bank Limited filed a Company Petition (CP (IB) No. 1065/MB/2023) under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Digital Ventures Private Limited, the Corporate Debtor (CD), due to a default on a loan facility of Rs. 125,00,00,000/-. The Financial Creditor (FC) claimed a total default amount of Rs.106,35,42,647.20/- as of 04.09.2023, including principal, interest, and penal interest. The CD contended that the application was barred by Section 10A of the IBC, arguing that the default occurred during the CIRP suspension period. The FC argued that the relevant date of default was 31.03.2021, outside the suspension period, and that the CD had acknowledged the debt in its annual

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## Facts

Axis Bank Limited (FC) sanctioned a loan facility of Rs. 125,00,00,000/- to Digital Ventures Private Limited (CD) for the purpose of repaying existing lenders and funding the capital expenditure of construction of a school at Bandra-Kurla Complex in Mumbai. The loan agreement was formalized through a Sanction Letter dated 08.09.2014 and a Common Loan Agreement (CLA) dated 25.09.2014. A Corporate Guarantee dated 25.08.2014 was executed by Zee Learn Limited, the 100% holding company of the CD. The CD defaulted in payment of its dues, leading to its loan account being classified as Non-Performing Asset (NPA) on 30.06.2021. The FC claimed a total default amount of Rs.106,35,42,647.20/- as of 04.09.2023. The CD argued that the default occurred during the CIRP suspension

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## Issues and analysis

### Issue 1: Whether the Application is …

**Ratio:** Section 10A of the IBC suspends the initiation of CIRP for defaults occurring during a

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**Reasoning:** The NCLT determined that the actual date of default for the purpose of Section 7 of the

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**Interpretation:** The interpretation of Section 10A hinges on identifying the actual date of

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**Application:** Since the default occurred on 31.03.2021, which is outside the CIRP suspension

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## Parties

- **Judges:** K. R. SAJI…; SANJIV…
- **Appellants:** Axis Bank L…
- **Respondents:** Digital Ventures…

## Timeline

- **2014-08-25 — Corporate Gu…**: Zee Learn Limited executed a Corporate…
- **2014-09-08 — Sanction…**: Axis Bank issued a Sanction…

## 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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