# In the matter of Feedback Infra Private Limited

> NCLT judgment dated 2024-01-11. Citation: TCN-2024-NCLT-03188. Federal Bank Limited, acting as the Financial Creditor, filed a Company Petition under Section…

- **Court:** NCLT
- **Order date:** 11 Jan 2024
- **Citation:** TCN-2024-NCLT-03188
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/feedback-infra-private-limited-f8cee19b

## Summary

### Background

Federal Bank Limited, acting as the Financial Creditor, filed a Company Petition under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, seeking initiation of the Corporate Insolvency Resolution Process (CIRP) against M/s Feedback Infra Private Limited, the Corporate Debtor. The Financial Creditor had provided various credit facilities, including term loans and cash credit facilities, to the Corporate Debtor. The Corporate Debtor also provided a corporate guarantee to secure loans from the applicant to the principal borrower, M/s Feedback Energy Distribution Company Ltd. The Corporate Debtor defaulted in repaying the credit facilities availed from the Financial Creditor, leading to the filing of this application.

## Facts

Federal Bank Limited (Financial Creditor) provided credit facilities to M/s Feedback Infra Private Limited (Corporate Debtor), including term loans and cash credit facilities. The Corporate Debtor also acted as a corporate guarantor for loans availed by M/s Feedback Energy Distribution Company Limited (Principal Borrower). The Corporate Debtor defaulted in repaying the credit facilities. The Financial Creditor sanctioned a term loan of Rs. 40,00,00,000/- on 22.08.2019. The Corporate Debtor executed various loan and security documents on 26.08.2019. The Corporate Debtor also availed a working capital/term loan of Rs. 10 Crores sanctioned on 18.02.2020. Further, the Financial Creditor sanctioned a loan of Rs. 11,60,00,000/- under the Emergency Guarantee Credit Line

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor committed a default in …

**Ratio:** Section 7 of the IBC, 2016, allows a Financial Creditor to initiate CIRP against a

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**Reasoning:** The court noted that the Corporate Debtor's account was classified as NPA and that the

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**Interpretation:** A 'default' under Section 3(12) of the IBC means non-payment of debt when whole

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**Application:** The Corporate Debtor's failure to repay the loan amount, coupled with the NPA

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## Parties

- **Judges:** Sh. Ashok Kumar…; L. N. G…
- **Appellants:** Federal Bank…
- **Respondents:** M/s. Feedback…

## Timeline

- **2019-08-22 — Sanction of T…**: Financial Creditor sanctioned a term loan of…
- **2019-08-26 — Execution of Loan…**: Corporate Debtor executed various loan and security documents in favour of the Financial…

## 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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