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

> NCLT judgment dated 2022-12-21. Citation: TCN-2022-NCLT-00088. 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-00088
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/feedback-energy-distribution-company-limited-ib-127nd-2022-99c93172

## 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 company was incorporated on 29.10.2012. The Applicant claimed default on financial assistance granted to the Respondent, including OD Facility and WTCL. The Respondent argued that no default was committed, citing various reasons including defective application, the pendency of recovery from its clients, and the applicability of Section 10A of IBC.

## Facts

SBM Bank (India) Limited ('Applicant/Financial Creditor') filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, 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 OD Facility of Rs. 20,00,00,000/- and WTCL for Rs. 3,98,00,000/- via sanction letters dated 17.01.2020, 24.01.2020, and 21.01.2021. Repayment was to be made by the 31st or the last day of the month. The Respondent defaulted on payments in July, August, September, and October. The account was classified as a default account, and a notice dated 20.10.2021 was sent to the Principal Borrower.

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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:** The court relied on the provisions of Section 7(5) of the IBC, which allows for the

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**Reasoning:** The court found that the default amount exceeded the threshold limit and that the

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**Interpretation:** Section 7 of the IBC allows a financial creditor to initiate CIRP against a

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

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## Parties

- **Judges:** BACHU VENKAT…; L. N. G…
- **Appellants:** SBM Bank (India)…
- **Respondents:** Feedback Energy…
- **Advocates:** Shilpa T…; P. Na…; +1 more

## Timeline

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

## Legal provisions

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

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