# In the matter of Iskrupa Mall Management Company Private Limited

> NCLT judgment dated 2024-09-24. Citation: TCN-2024-NCLT-00558. Central Bank of India, the Financial Creditor (FC), filed an application under Section 7 of the…

- **Court:** NCLT
- **Order date:** 24 Sept 2024
- **Citation:** TCN-2024-NCLT-00558
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/iskrupa-mall-management-company-private-limited-4f3606ee

## Summary

### Background

Central Bank of India, the Financial Creditor (FC), filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) against Iskrupa Mall Management Company Private Limited, the Corporate Debtor (CD), for initiating Corporate Insolvency Resolution Process (CIRP). The CD had approached the FC for financial facilities, leading to a credit facility granted vide Sanction Letter dated 19.09.2015. Subsequently, the CD entered into a Term Loan Agreement of Rs. 150 Crore with the FC on 24.09.2015. A default occurred on 30.09.2020, prompting the CD to request One Time Restructuring (OTR) under the 'Resolution Framework for COVID-19 related Stress' announced by the Reserve Bank of India (RBI). The OTR was approved by the FC, and a Restructuring Agreement

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## Facts

Central Bank of India (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Iskrupa Mall Management Company Private Limited (Corporate Debtor) to initiate Corporate Insolvency Resolution Process (CIRP). The Corporate Debtor had availed financial facilities from the Financial Creditor, leading to a Term Loan Agreement of Rs. 150 Crore. The Corporate Debtor defaulted on 30.09.2020, leading to a request for One Time Restructuring (OTR). The OTR was approved, and a Restructuring Agreement was executed on 21.06.2021. The Corporate Debtor failed to repay the principal and interest due on 31.03.2022 under the OTR. The account was downgraded to SMA-2 and then became a Non-Performing Asset (NPA) on 30.04.2022. The

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the IBC is maintainable for initiating CIRP against the …

**Ratio:** The legislative policy has moved away from the concept of “inability to pay debts” to

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**Reasoning:** The NCLT considered the CD's plea of liquidity issues due to the Covid-19 pandemic and

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**Interpretation:** The IBC prioritizes the determination of default over the reasons for the

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**Application:** The NCLT found that the CD had defaulted on its payment obligations, and the

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## Parties

- **Judges:** K. R. SAJI…; SANJIV…
- **Appellants:** Central Bank of…
- **Respondents:** Iskrupa Mall…

## Timeline

- **2015-09-19 — Sanction…**: FC granted credit facility to…
- **2015-09-24 — Term Loan Ag…**: CD entered into Term 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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