# In the matter of Mavin Switchgears and Control Private Limited

> NCLT judgment dated 2024-02-07. Citation: TCN-2024-NCLT-02707. ICICI Bank Limited filed a Company Petition under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 7 Feb 2024
- **Citation:** TCN-2024-NCLT-02707
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/mavin-switchgears-and-control-private-limited-01b64789

## Summary

### Background

ICICI Bank Limited filed a Company Petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Mavin Switchgears and Control Private Limited, alleging default in payment. The financial creditor had sanctioned credit facilities to the corporate debtor, which were later renewed. The corporate debtor started defaulting on payments in July 2021, leading to the account being classified as NPA in September 2021. Notices were issued under Section 13(2) of the SARFAESI Act, and an Original Application was filed before the Debt Recovery Tribunal, Aurangabad.

## Facts

ICICI Bank Limited (Financial Creditor) filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate CIRP against Mavin Switchgears and Control Private Limited (Corporate Debtor). The Corporate Debtor had approached the Financial Creditor and erstwhile State Bank of Hyderabad for credit facilities in August 2016, which were sanctioned for an aggregate amount of Rs. 41,00,00,000/-. Various security documents, including agreements of guarantee and deeds of mortgage, were executed. The Corporate Debtor started defaulting on payments in July 2021, leading to the account being classified as NPA on 28th September, 2021. The Financial Creditor issued notices under Section 13(2) of the SARFAESI Act on 3rd September, 2022, and 7th December, 2022,

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor committed a default …

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

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**Reasoning:** The court observed that the Corporate Debtor had failed to make payments as per the

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**Interpretation:** The term 'default' under the IBC refers to the non-payment of debt when it has

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**Application:** The Corporate Debtor's failure to adhere to the repayment schedule and the

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## Parties

- **Judges:** Kuldip Kumar…; ANIL RAJ C…
- **Appellants:** ICICI Bank…
- **Respondents:** Mavin Switchgears…
- **Advocates:** Yash Dh…; Ruchita…; +1 more

## Timeline

- **2016-08-01 — Credit Facilities…**: Corporate Debtor approached Financial Creditor and erstwhile State Bank of Hyderabad for…
- **2016-08-02 — Sanction Lett…**: Credit facilities were granted to the Corporate Debtor vide sanction letter dated…

## 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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