# In the matter of Tapi Prestressed Products Limited

> NCLT judgment dated 2023-11-02. Citation: TCN-2023-NCLT-00882. Axis Bank Limited filed a company petition under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 2 Nov 2023
- **Citation:** TCN-2023-NCLT-00882
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/tapi-prestressed-products-limited-04c01f28

## Summary

### Background

Axis 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 Tapi Prestressed Products Limited. The petition alleges that the Corporate Debtor defaulted on payments to the Petitioner, with an outstanding amount of Rs. 18,06,27,832 as of 30.11.2022. The Corporate Debtor was granted loan facilities originally in December 2009, which were renewed periodically. The final modification of the sanction letter occurred on 16.07.2019, setting the final bank guarantee facility at Rs. 17 crores. The Corporate Debtor's account was declared a Non-Performing Asset (NPA) on 30.07.2021.

## Facts

Axis Bank Limited (the Petitioner/Financial Creditor) sanctioned credit facilities to Tapi Prestressed Products Limited (the Respondent/Corporate Debtor) starting from 04.12.2009, with a total limit of Rs. 25 Crores. These facilities were renewed multiple times. The final modification occurred on 16.07.2019, setting the Bank Guarantee Facility (BGF) limit at Rs. 17 crores. The facilities included a Cash Credit facility (Rs. 15 crores) and a Letter of Credit (Rs. 5 crores). From March 2010, the Petitioner disbursed amounts under the Cash Credit Facility, but the Corporate Debtor defaulted multiple times. In 2020, a Working Capital Term Loan (WCTL) facility of Rs. 2.87 crores was sanctioned. Due to continuous defaults, the Corporate Debtor was classified as a

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## Issues and analysis

### Issue 1: Whether the petition filed by Axis Bank Limited under Section 7 of the Insolvency and Bankruptcy …

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

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**Reasoning:** The court found that the Petitioner had established the existence of a financial debt and

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

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

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## Parties

- **Judges:** Kuldip Kumar…; ANURADHA SANJAY…
- **Appellants:** Axis Bank L…
- **Respondents:** Tapi Prestressed…
- **Advocates:** Neha…; Gaurav…

## Timeline

- **2009-12-01 — Loan Facilitie…**: Loan facilities were originally…
- **2019-07-16 — Final Modification of…**: The final modification of the sanction letter took place, setting the final bank…

## 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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