# In the matter of Feedback Energy Distribution Company Limited (IB)-127(ND)-2022

> NCLT judgment dated 2022-12-21. Citation: TCN-2022-NCLT-00087. SBM Bank (India) Limited, the 'Applicant/Financial Creditor', filed a petition under Section 7…

- **Court:** NCLT
- **Order date:** 21 Dec 2022
- **Citation:** TCN-2022-NCLT-00087
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/feedback-energy-distribution-company-limited-ib-127nd-2022-6d96dee1

## Summary

### Background

SBM Bank (India) Limited, the 'Applicant/Financial Creditor', filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s. Feedback Energy Distribution Company Limited, the 'Respondent'. The Respondent is a company incorporated on 29.10.2012. The Applicant claimed default on financial assistance granted to the Respondent, including OD Facility and WTCL. The Respondent opposed the application, citing various reasons including the applicability of Section 10A of IBC, the existence of a Force Majeure situation, and the pendency of arbitration proceedings.

## Facts

SBM Bank (India) Limited ('Applicant/Financial Creditor') filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 ('IBC') to initiate Corporate Insolvency Resolution Process ('CIRP') against Feedback Energy Distribution Company Limited ('Respondent'). The Respondent was incorporated on 29.10.2012. The Applicant granted financial assistance to the Respondent, including an Over Draft (OD) Facility of Rs. 20,00,00,000/- and Working Capital Term Loan (WTCL) of Rs. 3,98,00,000/-. The repayment was to be made by the 31st or last day of the month. The Respondent defaulted on payments due in July, August, September, and October. The account was classified as a default account, and a notice was sent on 20.10.2021. The account was classified as NPA on

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the IBC is maintainable for initiating CIRP against the …

**Ratio:** Section 7(5) of the IBC allows for the admission of an application if the default in

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**Reasoning:** The court found that the default in payment of the financial debt was established and the

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**Interpretation:** Section 7 of the IBC provides the mechanism for a financial creditor to

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**Application:** The court applied Section 7(5) of the IBC to the facts of the case and found

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## Parties

- **Judges:** SH. BACHU VENKAT…; SH. L. N.…
- **Appellants:** SBM Bank (India)…
- **Respondents:** Feedback Energy…

## Timeline

- **2012-10-29 — Incorporation of…**: Feedback Energy Distribution…
- **2020-01-17 — Sanction Lett…**: Sanction Letter dated 17.01.2020 providing Over Draft Facility and STL (sublimit) to the…

## 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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