# In the matter of Supreme Housing and Hospitality Private Limited CP (IB) No.1397-MB-IV-2020

> NCLT judgment dated 2022-11-23. Citation: TCN-2022-NCLT-00359. The case involves a Company Petition, C.P. (IB) No. 1397/NCLT/MB/C-IV/2020, filed by Canara…

- **Court:** NCLT
- **Order date:** 23 Nov 2022
- **Citation:** TCN-2022-NCLT-00359
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/supreme-housing-and-hospitality-private-limited-cp-ib-no1397-mb-iv-2020-a5736071

## Summary

### Background

The case involves a Company Petition, C.P. (IB) No. 1397/NCLT/MB/C-IV/2020, filed by Canara Bank (formerly Syndicate Bank) under Section 7 of the Insolvency & Bankruptcy Code, 2016, against Supreme Housing & Hospitality Private Limited, the Corporate Debtor, for initiating the Corporate Insolvency Resolution Process (CIRP). The Financial Creditor had granted a Term Loan (LRD) facility of Rs. 390 Crores to the Corporate Debtor. The Corporate Debtor defaulted on repayments, leading to the account being classified as a Non-Performing Asset (NPA). The Financial Creditor issued demand notices under Section 13(2) of the SARFAESI Act, but the Corporate Debtor failed to repay the outstanding dues.

## Facts

Canara Bank (formerly Syndicate Bank) granted a Term Loan (LRD) facility of Rs. 390 Crores to Supreme Housing & Hospitality Private Limited. The loan was disbursed on 16.05.2014. The repayment was structured in 108 monthly installments commencing from March 2014. The Corporate Debtor defaulted on the repayment, leading to the account being classified as a Non-Performing Asset (NPA) on 29.09.2017. The Financial Creditor issued a Demand Notice under Section 13(2) of the SARFAESI Act on 30.10.2017, demanding Rs. 3,38,00,92,050.42. The Corporate Debtor replied on 23.12.2017. A Recall Notice/Final Notice was issued on 09.01.2018 for Rs. 365,47,98,126.03. The Corporate Debtor failed to repay the outstanding dues. The Corporate Debtor claimed it had an outstanding against

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## Issues and analysis

### Issue 1: Whether the application filed by Canara Bank under Section 7 of the Insolvency & Bankruptcy …

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

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**Reasoning:** The court observed that the Financial Creditor had granted a Term Loan (LRD) facility to

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**Interpretation:** Section 7 provides the mechanism for a financial creditor to trigger the

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**Application:** The court applied Section 7 to the facts of the case, noting that Canara Bank,

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## Parties

- **Judges:** Manoj Kumar…; KISHORE VEMULAPALL…
- **Appellants:** Canara…
- **Respondents:** Supreme Housing &…

## Timeline

- **2014-01-12 — Term Loan App…**: Corporate Debtor approached the Financial…
- **2014-03-01 — Repayment Co…**: Repayment of Term Loan was to…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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