# In the matter of Vivimid Labs Limited

> NCLT judgment dated 2024-07-30. Citation: TCN-2024-NCLT-00922. State Bank of India initiated Corporate Insolvency Resolution Process (CIRP) against Vivimed…

- **Court:** NCLT
- **Order date:** 30 Jul 2024
- **Citation:** TCN-2024-NCLT-00922
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/vivimid-labs-limited-1b09a04e

## Summary

### Background

State Bank of India initiated Corporate Insolvency Resolution Process (CIRP) against Vivimed Labs Limited, claiming a default of Rs. 241,40,62,023.40 as of June 30, 2022. The financial creditor, SBI, sought to initiate CIRP under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016. The corporate debtor availed financial assistance from the erstwhile State Bank of Hyderabad (SBH), which later merged with SBI. Various credit facilities and term loans were sanctioned to the corporate debtor under multiple sanction letters. The corporate debtor faced financial difficulties, leading to the account being classified as NPA (Non-Performing Asset).

## Facts

State Bank of India (SBI) filed a petition under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, against Vivimed Labs Limited, seeking to initiate Corporate Insolvency Resolution Process (CIRP). The claim was based on a total outstanding default amount of Rs. 241,40,62,023.40 as of June 30, 2022. SBI, as the financial creditor, had sanctioned various credit facilities and term loans to Vivimed Labs Limited through the erstwhile State Bank of Hyderabad (SBH), which later merged with SBI. The corporate debtor availed financial assistance from SBH under Sanction Letter dated 24.01.2004 and the limits sanctioned therein were Rs. 10,95,00,000/-. Thereafter, at the request of Corporate Debtor seeking renewal-cum- enhancement of the financial assistance, vide

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## Issues and analysis

### Issue 1: Whether the date of default falls within the period specified under Section 10A of the IBC, thereby …

**Ratio:** Section 10A of the IBC prohibits the initiation of CIRP for defaults occurring between

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**Reasoning:** The NCLT reasoned that the legislative intent behind Section 10A was to completely bar

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**Interpretation:** Section 10A provides a bar on initiating CIRP for defaults occurring during the

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**Application:** In this case, the NCLT found that the date of NPA declaration was January 28,

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## Parties

- **Judges:** K. Bi…; Manoj Kumar…
- **Appellants:** State Bank of…
- **Respondents:** Vivimed Labs…

## Timeline

- **2004-01-24 — Sanction…**: SBH sanctioned financial assistance to Corporate…
- **2004-08-10 — Sanction…**: SBH enhanced financial assistance to Corporate…

## 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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