# In the matter of GI International Private Limited C.P. (IB) No. 590-KB-2020

> NCLT judgment dated 2022-05-19. Citation: TCN-2022-NCLT-02692. Tata Capital Financial Services Limited filed an application under Section 7 of the Insolvency…

- **Court:** NCLT
- **Order date:** 19 May 2022
- **Citation:** TCN-2022-NCLT-02692
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/gi-international-private-limited-cp-ib-no-590-kb-2020-17f1e74e

## Summary

### Background

Tata Capital Financial Services Limited filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against G.I. International Private Limited, seeking initiation of Corporate Insolvency Resolution Process (CIRP). The financial creditor claimed that the corporate debtor defaulted on credit facilities availed for business requirements. The corporate debtor obtained various credit facilities from the financial creditor bank in several accounts with different sub-limits with an overall limit which was enhanced from time to time. The financial creditor submitted that the corporate debtor had failed to clear outstanding dues despite repeated requests and reminders.

## Facts

Tata Capital Financial Services Limited (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against G.I. International Private Limited (Corporate Debtor). The Corporate Debtor had availed credit facilities from the Financial Creditor for business requirements. The initial credit facility of Rs. 5,00,00,000/- was sanctioned on May 5, 2015. This was followed by subsequent enhancements and renewals of the credit facility, including a facility of Rs. 14,00,00,000/- sanctioned on February 22, 2016. The credit facilities were secured by guarantees from the directors of the Corporate Debtor and M/s Wellbuild Plaza. The Corporate Debtor failed to make regular payments, leading the Financial Creditor to issue a demand notice on

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor under Section 7 of the Insolvency and …

**Ratio:** Section 7 of the Insolvency and Bankruptcy Code, 2016 allows a financial creditor to

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**Reasoning:** The court considered the various loan agreements, sanction letters, revival letters, and

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**Interpretation:** Section 7 provides a mechanism for financial creditors to recover their dues

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**Application:** The court found that the Corporate Debtor had committed default and failed to

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## Parties

- **Judges:** Rohit K…; Harish Chander…; +1 more
- **Appellants:** Tata Capital…
- **Respondents:** G.I. International…

## Timeline

- **2015-05-05 — Initial Credit Facility…**: Financial Creditor sanctioned a credit facility of Rs. 5,00,00,000/- to the Corporate…
- **2016-02-22 — Credit Facility…**: Financial Creditor sanctioned a credit facility of Rs. 14,00,00,000/- to the Corporate…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(8) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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