# In the matter of Green India Building Systems & Services Pvt. Ltd.

> NCLT judgment dated 2024-01-24. Citation: TCN-2024-NCLT-02932. The case involves a petition filed by M/s Small Industries Development Bank of India (SIDBI),…

- **Court:** NCLT
- **Order date:** 24 Jan 2024
- **Citation:** TCN-2024-NCLT-02932
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/green-india-building-systems-services-pvt-ltd-634c5317

## Summary

### Background

The case involves a petition filed by M/s Small Industries Development Bank of India (SIDBI), the Financial Creditor, under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s Green India Building Systems & Services Pvt. Ltd., the Corporate Debtor, due to default in repayment of debt. The Corporate Debtor had approached SIDBI for various loan facilities, including venture loans, OCD, and working capital loans, which were sanctioned and disbursed. However, the Corporate Debtor defaulted on repayments, leading to the issuance of a loan recall notice by SIDBI. Despite this, the default continued, prompting SIDBI to file the present petition before the NCLT.

## Facts

M/s Small Industries Development Bank of India (SIDBI) filed a petition under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s Green India Building Systems & Services Pvt. Ltd. The Corporate Debtor had approached SIDBI for a facility of Venture loan 100.00 lakh, OCD & Equity Investment of Rupees 100.00 lakh, and Working Capital Loan of 200 Lakhs. SIDBI sanctioned a loan facility of Rs.1,00,00,000 under “Venture Debt-Startup Assistance Schemes for MSMEs', Rs. 1,00,00,000/- in the form of Optionally Convertible Debt (OCD) under the Startup Assistance Scheme (SAS) for MSMEs and Rs.2,00,00,000 under the "Working Capital Term Loan Scheme". A Letter of Intent was issued dated

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## Issues and analysis

### Issue 1: Whether the Financial Creditor has established the existence of a financial debt and default by the …

**Ratio:** The legal principle applied is that under Section 7 of the IBC, a financial creditor can

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**Reasoning:** The NCLT reasoned that the Financial Creditor had provided sufficient evidence, including

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**Interpretation:** The interpretation of Section 5(8) and Section 3(12) of the IBC is that a

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**Application:** The ratio and reasoning were applied to the facts by considering the loan

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## Parties

- **Judges:** Kuldip Kumar…; SH. PRABHAT…
- **Appellants:** M/s Small…
- **Respondents:** M/s Green India…
- **Advocates:** Bharti Na…; Vishal Sh…; +1 more

## Timeline

- **2009-12-14 — Incorporation of…**: M/s Green India Building Systems & Services Pvt. Ltd. incorporated under Companies Act,…
- **2014-03-27 — Letter of…**: Letter of Intent issued…

## 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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