# In the matter of Viceroy Bangalore Hotels Pvt. Ltd. CP (IB) No. 88-7-HDB-2022

> NCLT judgment dated 2022-08-05. Citation: TCN-2022-NCLT-01445. The case involves a Company Application filed by Edelweiss Assets Reconstruction Company…

- **Court:** NCLT
- **Order date:** 5 Aug 2022
- **Citation:** TCN-2022-NCLT-01445
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/viceroy-bangalore-hotels-pvt-ltd-cp-ib-no-88-7-hdb-2022-10a5c04e

## Summary

### Background

The case involves a Company Application filed by Edelweiss Assets Reconstruction Company Limited (Financial Creditor) under Section 7 of the Insolvency and Bankruptcy Code, 2016, read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, for initiating Corporate Insolvency Resolution Process (CIRP) against Viceroy Bangalore Hotels Private Limited (Corporate Debtor). The Financial Creditor claims that the Corporate Debtor defaulted on payments towards interest due on 15.09.2019, leading to a recall of the entire debt, resulting in a default of Rs.755,26,61,289/-. Originally, various term loans were accorded to the Corporate Debtor by a consortium of banks, which were later assigned to the Financial Creditor.

## Facts

A consortium of banks, including Punjab National Bank, IDBI Bank, Union Bank of India, and Jammu and Kashmir Bank, sanctioned and disbursed various loans to Viceroy Bangalore Hotels Private Limited for the construction of a five-star hotel in Bangalore. The initial term loan was Rs. 206,00,00,000/-. Additional term loans and bank guarantees totaling Rs. 70.31 crores were sanctioned for time and cost overruns. The original lenders assigned their respective portions of the loans to Edelweiss Assets Reconstruction Company Limited (Financial Creditor) through valid deeds of assignment. The loans were restructured under a Master Restructuring Agreement (MRA) dated 19.06.2017, reducing the debt to Rs. 317,00,00,000/-. The Corporate Debtor defaulted on payment of interest due

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor is in default of a financial debt as defined under the Insolvency and …

**Ratio:** The legal principle is that if a corporate debtor fails to make payments towards a

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**Reasoning:** The court reasoned that the Corporate Debtor admitted to being in default of the

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**Interpretation:** The interpretation of 'financial debt' and 'default' under the IBC is central

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**Application:** In this case, the Corporate Debtor failed to make payments towards interest due

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## Parties

- **Judges:** DR.VENKATA…; Veera Brahma Rao…
- **Appellants:** Edelweiss Assets…
- **Respondents:** Viceroy Bangalore…

## Timeline

- **2012-03-29 — Common Loan A…**: A Common Loan Agreement was executed between the original lenders and the Corporate…
- **2014-03-20 — Common Loan Agreement…**: A Common Loan Agreement was dated 20.03.2014, read with the supplementary Loan Agreement…

## 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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