# In the matter of GJS Infratech Private Limited

> NCLT judgment dated 2024-03-01. Citation: TCN-2024-NCLT-02256. Canara Bank filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 1 Mar 2024
- **Citation:** TCN-2024-NCLT-02256
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/gjs-infratech-private-limited-70735497

## Summary

### Background

Canara Bank filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against M/s. GJS Infratech Private Limited, alleging default in payment of a financial debt exceeding one crore rupees. The corporate debtor had availed credit and ECLGS facilities from the bank. The bank classified the corporate debtor's account as a non-performing asset (NPA) on 2022-05-29 due to the default. The bank issued a demand notice on 2022-10-06, but received no response, leading to the filing of the petition.

## Facts

Canara Bank, the financial creditor, filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against M/s. GJS Infratech Private Limited, the corporate debtor. The corporate debtor had availed credit and ECLGS facilities from Canara Bank under a Working Capital Facility Agreement dated 2023-10-11. The total amount due was Rs. 125,40,00,000/-. The corporate debtor defaulted in discharging the debt, leading Canara Bank to classify the account as a non-performing asset on 2022-05-29. Canara Bank issued a demand notice on 2022-10-06 for Rs. 117,17,14,260.34/-, but received no response. The pre-admission notice to the corporate debtor was returned unserved, leading to substituted service through newspaper publication. The petitioner submitted various

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## Issues and analysis

### Issue 1: Whether a financial debt of a sum exceeding rupees one crore due and payable by the respondent to …

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

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**Reasoning:** The Tribunal examined the documents submitted by the financial creditor, including the

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**Interpretation:** The existence of a financial debt is determined by examining the loan

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**Application:** The Tribunal found that the corporate debtor had availed credit facilities

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## Parties

- **Judges:** Venkata Ramakrishn…; SH. CHARAN…
- **Appellants:** Canara…
- **Respondents:** M/s. GJS Infratech…

## Timeline

- **2022-05-29 — Account Classified as…**: The account of M/s. GJS Infratech Private Limited was classified as a non-performing…
- **2022-10-06 — Demand Notice…**: Canara Bank issued a demand notice to M/s. GJS Infratech Private Limited for 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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