# In the matter of VAS Infrastructure Limited

> NCLT judgment dated 2024-03-11. Citation: TCN-2024-NCLT-02117. Canara Bank filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 11 Mar 2024
- **Citation:** TCN-2024-NCLT-02117
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/vas-infrastructure-limited-a19a69eb

## Summary

### Background

Canara Bank filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against VAS Infrastructure Limited due to a default of INR 301,06,84,507.23. The Corporate Debtor's loan accounts were classified as Non-Performing Assets (NPA) on 29.08.2015. The Financial Creditor claimed the date of default as 31.08.2022. The Corporate Debtor objected to the maintainability of the petition, arguing that the debt was identified as an 'Operational Debt' and that the petition was barred by limitation.

## Facts

Canara Bank filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against VAS Infrastructure Limited. The application was triggered by a default of INR 301,06,84,507.23. The erstwhile Financial Creditor, Syndicate Bank, had sanctioned a non-fund based working capital loan of Rs. 55 crores to the Corporate Debtor on 26.06.2012. This facility was later enhanced to Rs. 60 crores on 11.03.2013. Term loans of Rs. 75 crores and Rs. 40 crores were sanctioned on 01.03.2013 and 15.07.2013, respectively. The loan accounts were classified as Non-Performing Assets (NPA) on 29.08.2015. The Corporate Debtor issued a Revival Letter on 28.05.2018, acknowledging its debt. A Demand Notice was issued

…

## Issues and analysis

### Issue 1: Whether the application under Section 7 of the IBC is maintainable despite the Corporate Debtor's …

**Ratio:** The substance of the transaction prevails over its form. A 'financial debt' is defined

…

**Reasoning:** The NCLT found that the debt in the present case was, in substance, a 'financial debt' as

…

**Interpretation:** The Tribunal interpreted the provisions of Section 5(8) of the IBC to mean that

…

**Application:** The Tribunal applied the ratio to the facts of the case, holding that since the

…

## Parties

- **Judges:** ANIL RAJ C…; Kuldip Kumar…
- **Appellants:** Canara…
- **Respondents:** VAS INFRASTRUCTURE…

## Timeline

- **2012-06-26 — Sanction of Working…**: Syndicate Bank sanctioned a non-fund based working capital loan of Rs. 55 crores to the…
- **2013-03-01 — Sanction of T…**: Term Loan of Rs. 75 crores was sanctioned for…

## 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)

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/vas-infrastructure-limited-a19a69eb