# In the matter of EMI Infrastructure Private Limited CP(IB)-178(CHE)-2022

> NCLT judgment dated 2023-02-01. Citation: TCN-2023-NCLT-04826. The case pertains to an application filed by M/s. Shriram Transport Finance Company Limited…

- **Court:** NCLT
- **Order date:** 1 Feb 2023
- **Citation:** TCN-2023-NCLT-04826
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/emi-infrastructure-private-limited-cpib-178che-2022-657280ce

## Summary

### Background

The case pertains to an application filed by M/s. Shriram Transport Finance Company Limited (Financial Creditor) under Section 7 of the Insolvency and Bankruptcy Code, 2016, r/w Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s. EMI Infrastructure Private Limited (Corporate Debtor). The Financial Creditor claimed a total debt of Rs. 6,62,41,657.08/- due from the Corporate Debtor, arising from twelve individual loan accounts for vehicle purchases. The Corporate Debtor allegedly defaulted on repayments, leading to the classification of the loan accounts as Non-Performing Assets (NPA).

## Facts

M/s. Shriram Transport Finance Company Limited (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s. EMI Infrastructure Private Limited (Corporate Debtor). The Financial Creditor claimed a total debt of Rs. 6,62,41,657.08/- due from the Corporate Debtor as of the date of filing the application. This debt arose from twelve individual loan accounts obtained by the Corporate Debtor for the purchase of vehicles. The Corporate Debtor executed 'Hypothecation Cum Loan Agreements' and 'Demand Promissory Notes' for each vehicle. The Corporate Debtor defaulted on repayments, leading to the classification of the loan accounts as Non-Performing Assets (NPA)

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor under Section 7 of the IBC is maintainable …

**Ratio:** The exercise of a contractual right cannot bar the Financial Creditor from invoking

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**Reasoning:** The Tribunal held that the Financial Creditor's actions of seizing vehicles and

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**Interpretation:** Section 7 of the IBC provides an independent remedy for financial creditors to

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**Application:** The Tribunal applied the principle that the exercise of a contractual right

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## Parties

- **Judges:** DEEPTI M…; SAMEER…
- **Appellants:** M/S. SHRIRAM…
- **Respondents:** M/s. EMI INFRASTRU…
- **Advocates:** Brath…

## Timeline

- **2022-07-15 — Application…**: M/s. Shriram Transport Finance Company Limited filed an application under Section 7 of…
- **2022-12-01 — Corporate Debtor Files…**: The Corporate Debtor filed a reply to the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14(1) — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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