# In the matter of Siti Networks Limited C.P. No. 690-IBC-MB-2022

> NCLT judgment dated 2023-02-22. Citation: TCN-2023-NCLT-04498. IndusInd Bank Limited filed a company petition under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 22 Feb 2023
- **Citation:** TCN-2023-NCLT-04498
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/siti-networks-limited-cp-no-690-ibc-mb-2022-bb31af4b

## Summary

### Background

IndusInd 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 Siti Networks Limited, citing an unresolved financial debt of Rs. 1,48,82,90,236.22. The financial creditor claimed that the corporate debtor defaulted on its payment obligations. The corporate debtor resisted the admission of the petition, primarily arguing that the loan agreement was insufficiently stamped, the petition was filed by an unauthorized person, and the default occurred during the COVID-19 period, thus being barred by Section 10A of the Code.

## Facts

IndusInd Bank Limited (Financial Creditor) filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate CIRP against Siti Networks Limited (Corporate Debtor) due to a financial debt of Rs. 1,48,82,90,236.22. The debt arose from two term loans (Term Loan 1 and Term Loan 2) sanctioned to the Corporate Debtor. The Corporate Debtor defaulted on maintaining the Debt Service Reserve Account (DSRA) and failed to make payments as per the loan agreements. The Financial Creditor issued notices of default and demand. The Corporate Debtor argued that the loan agreement was insufficiently stamped, the petition was filed by an unauthorized person, and the default occurred during the COVID-19 period, thus being barred by Section 10A of the Code. The

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## Issues and analysis

### Issue 1: Whether the loan agreement is insufficiently stamped under the provisions of the Maharashtra Stamp …

**Ratio:** The NCLT can look into the documents

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**Reasoning:** The Corporate Debtor argued that the loan agreement was insufficiently stamped under the

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**Interpretation:** The Maharashtra Stamp Act's provisions regarding the admissibility of

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**Application:** The tribunal did not find merit in the argument that the loan agreement was

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## Parties

- **Judges:** H.V. Subb…; Madhu S…
- **Appellants:** IndusInd Bank…
- **Respondents:** Siti Networks…
- **Advocates:** Ashish S.…; Pratiksha A…; +4 more

## Timeline

- **2018-06-29 — Sanction Lett…**: Sanction Letter dated 29 June 2018 bearing ref. No: IBL/CAD/987/2018-19 (“Sanction Letter…
- **2018-08-24 — Hypothecation…**: Hypothecation Agreement for Multi-Facility Purpose dated 24 August 2018 (“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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