# In the matter of Global Metal & Energy Private Limited

> NCLT judgment dated 2024-10-15. Citation: TCN-2024-NCLT-00430. REC Limited, the Financial Creditor, filed an application under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 15 Oct 2024
- **Citation:** TCN-2024-NCLT-00430
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/global-metal-energy-private-limited-aff1850f

## Summary

### Background

REC Limited, the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Global Metal & Energy Private Limited, the Corporate Debtor. The Corporate Debtor had defaulted on a rupee term loan facility provided by the Financial Creditor for setting up a wind power project. The Corporate Debtor's account was declared an NPA, and despite some payments, defaults continued. The Financial Creditor issued demand notices and a loan recall notice. The Corporate Debtor acknowledged the debt but failed to clear the outstanding amounts. The Corporate Debtor raised objections, claiming the application was barred under Section 10A of the Code due to the default falling

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## Facts

REC Limited (Financial Creditor) provided a rupee term loan facility of Rs.47.09 Crore to Global Metal & Energy Private Limited (Corporate Debtor) vide Loan Agreement dated 03.06.2015 for setting up a 10 MW Wind Power Project. The Corporate Debtor defaulted in repayment, leading to its account being declared an NPA on 30.09.2018. The Corporate Debtor made some payments, and the account was standardized, but it again defaulted on 31.12.2020, and the account was reclassified as NPA on 31.03.2021. The Financial Creditor issued a loan recall notice dated 07.07.2021. As of 10.08.2023, the total outstanding debt was Rs.39,57,24,585/-. The Financial Creditor filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, on 05.09.2023. The Corporate

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## Issues and analysis

### Issue 1: Whether the present Application is barred by the provisions of Section 10A of the Insolvency and …

**Ratio:** Section 10A of the Insolvency and Bankruptcy Code, 2016, prohibits the initiation of CIRP

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**Reasoning:** The Tribunal reasoned that the date of default, as initially stated by the Financial

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**Interpretation:** Section 10A must be interpreted in light of its object, which is to provide

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**Application:** In this case, the Tribunal applied Section 10A to the facts and found that the

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## Parties

- **Judges:** K. R. SAJI…; SANJIV…
- **Appellants:** REC Lim…
- **Respondents:** GLOBAL METAL &…

## Timeline

- **2015-06-03 — Loan Agre…**: REC Limited provided a rupee term loan facility…
- **2018-09-30 — Account Decla…**: The Corporate Debtor's account was…

## 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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