# In the matter of Religare Enterprises Ltd.

> NCLT judgment dated 2023-07-11. Citation: TCN-2023-NCLT-02580. Ligare Aviation Ltd. filed an application under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 11 Jul 2023
- **Citation:** TCN-2023-NCLT-02580
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/religare-enterprises-ltd-9ea6b04e

## Summary

### Background

Ligare Aviation Ltd. filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against Religare Enterprises, the corporate guarantor of the principal borrower, Auriga Marketing Services Private Limited. The petition was filed on the grounds that the principal borrower defaulted on a payment of Rs. 35,55,00,000, with interest accruing to Rs. 74,20,31,453 as of January 27, 2023. A Memorandum of Understanding (MOU) dated September 22, 2011, was entered into between the principal borrower and the financial creditor for an unsecured demand loan of Rs. 50 crores at an interest rate of 14.25% p.a., signed upon the instruction of the corporate debtor.

## Facts

1. Ligare Aviation Ltd. filed a Section 7 application under the Insolvency and Bankruptcy Code, 2016, to initiate CIRP against Religare Enterprises Ltd.
2. Religare Enterprises Ltd. is the corporate guarantor for Auriga Marketing Services Private Limited, the principal borrower.
3. The principal borrower defaulted on a payment of Rs. 35,55,00,000, with interest accruing to Rs. 74,20,31,453 as of January 27, 2023.
4. An MOU dated September 22, 2011, was in place between the principal borrower and the financial creditor for an unsecured demand loan of Rs. 50 crores at 14.25% p.a.
5. Religare Enterprises Ltd. argued that it is a financial service provider and is excluded from the definition of 'Corporate Person' under Section 3(7) of the IBC, 2016, as it is a registered NBFC

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## Issues and analysis

### Issue 1: Whether the Section 7 petition filed by Ligare Aviation Ltd. is maintainable against Religare …

**Ratio:** The legal principle applied is that financial service providers are excluded from the

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**Reasoning:** The court reasoned that Religare Enterprises, being a registered NBFC and CIC with the

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**Interpretation:** Section 3(7) of the IBC defines 'Corporate Person' but explicitly excludes any

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**Application:** The court applied the ratio and reasoning to the specific facts of the case,

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## Parties

- **Judges:** Ramalingam…; ATUL CHAT…
- **Appellants:** Ligare Aviation…
- **Respondents:** Religare Enterpris…

## Timeline

- **2011-09-22 — Memorandum of…**: Memorandum of Understanding (MOU) was entered into between the principal borrower and the…
- **2023-01-27 — Default…**: Principal borrower defaulted on a payment of Rs. 35,55,00,000, with interest accruing to…

## 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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