# In the matter of HBS Auto and ANC SEZ Pvt. Ltd.

> NCLT judgment dated 2024-01-02. Citation: TCN-2024-NCLT-03347. SREI Equipment Finance Ltd. filed a petition under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 2 Jan 2024
- **Citation:** TCN-2024-NCLT-03347
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/hbs-auto-and-anc-sez-pvt-ltd-aca93275

## Summary

### Background

SREI Equipment Finance Ltd. filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against HBS Auto and ANC SEZ Private Limited, citing default on financial debt. The corporate debtor is engaged in real estate development, including Special Economic Zones (SEZ). The corporate debtor approached the financial creditor for financial assistance for the project. The financial creditor and corporate debtor entered into Rupee Loan Agreements. The corporate debtor availed credit facilities from the financial creditor under various contracts.

## Facts

SREI Equipment Finance Ltd. (Financial Creditor) filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against HBS Auto and ANC SEZ Private Limited (Corporate Debtor). The Corporate Debtor is in the business of 'Real Estate Development', including Special Economic Zones (SEZ). The Corporate Debtor approached the Financial Creditor for financial assistance for the SEZ project. The outstanding financial debt as of 14.01.2020 was Rs. 58,38,09,754/-, with a default of Rs. 16,24,39,272/- as of 16.06.2020. The date of default is stated to be 15.12.2019. The Corporate Debtor availed credit facilities of Rs. 60,00,00,000/- under Contract No. 136471 and Rs. 6,00,00,000/- under Contract no.

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor defaulted on its …

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

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**Reasoning:** The Tribunal found that the Corporate Debtor had defaulted on its financial obligations,

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**Interpretation:** Section 7 of the IBC provides the mechanism for financial creditors to trigger

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**Application:** The Corporate Debtor's failure to make payments as per the loan agreements,

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## Parties

- **Judges:** Prabhat…; V.G. B…
- **Appellants:** SREI EQUIPMENT…
- **Respondents:** HBS Auto & Anc…

## Timeline

- **2017-07-19 — Rupee Loan Ag…**: Financial Creditor entered into Rupee…
- **2019-09-15 — Loan Agre…**: Financial Creditor entered into Loan…

## 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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