# In the matter of MGI Infra Private Limited

> NCLT judgment dated 2023-08-09. Citation: TCN-2023-NCLT-02109. LVS Financial Services Private Limited, a Non-Banking Finance Company, filed an application…

- **Court:** NCLT
- **Order date:** 9 Aug 2023
- **Citation:** TCN-2023-NCLT-02109
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/mgi-infra-private-limited-22b7b465

## Summary

### Background

LVS Financial Services Private Limited, a Non-Banking Finance Company, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against MGI Infra Private Limited, the Corporate Debtor. The Corporate Debtor was incorporated on 10.10.2011. LVS Financial Services had sanctioned various facilities to MGI Infra Private Limited on 01.06.2022, and a loan agreement was entered into on the same date. The applicant disbursed Rs. 5,00,00,000/- to the Corporate Debtor.

## Facts

LVS Financial Services Private Limited (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against MGI Infra Private Limited (Corporate Debtor). The Financial Creditor is a Non-Banking Finance Company registered with the Reserve Bank of India. The Corporate Debtor was incorporated on 10.10.2011. On 01.06.2022, the Financial Creditor sanctioned various facilities to the Corporate Debtor, and a loan agreement was entered into on the same date. The amount of Rs. 5,00,00,000/- was disbursed to the Corporate Debtor between 18.06.2022 and 02.08.2022. The Financial Creditor claimed Rs. 5,17,85,496/- as of 10.01.2023, the date of declaration of NPA. The Corporate

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## Issues and analysis

### Issue 1: Whether the application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, for …

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

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**Reasoning:** The Adjudicating Authority found that the Financial Creditor had provided sufficient

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**Interpretation:** Section 7 provides a mechanism for financial creditors to recover their dues

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**Application:** In this case, the Financial Creditor proved the existence of a debt and a

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## Parties

- **Judges:** Ramalingam…; AVINASH K.…
- **Appellants:** LVS Financial…
- **Respondents:** MGI Infra Private…

## Timeline

- **2011-10-10 — Incorporation of…**: MGI Infra Private Limited was…
- **2022-06-01 — Sanction o…**: LVS Financial Services sanctioned various…

## 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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