# In the matter of Cholamandalam Investment and Finance Company Ltd. Vs. Navrang Roadlines Pvt. Ltd. O.S.A. (CAD) No. 115 of 2022

> HC judgment dated 2022-12-01. Citation: TCN-2022-HC-00012. Cholamandalam Investment and Finance Company Ltd. (the appellant) filed an appeal against an order…

- **Court:** HC
- **Order date:** 1 Dec 2022
- **Citation:** TCN-2022-HC-00012
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/high-courts-new-delhi/cholamandalam-investment-and-finance-company-ltd-vs-navrang-roadlines-pvt-ltd-os-b4c8360b

## Summary

### Background

Cholamandalam Investment and Finance Company Ltd. (the appellant) filed an appeal against an order permitting the Liquidator of Navrang Roadlines Private Limited (the respondent) to withdraw Rs. 15,55,290.10 lying in credit of Application No. 3703 of 2019. The appellant and respondent had entered into a Trip Loan Agreement on 17.04.2018, with the appellant extending a loan facility of Rs. 1,75,00,000 to the respondent. The respondent defaulted on repayments, leading the appellant to invoke Section 9 of the Arbitration and Conciliation Act, 1996. The court prohibited garnishees from making payments to the respondent and directed them to deposit amounts. The appellant initiated arbitration proceedings and secured a final award. The respondent then filed a petition under

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## Facts

M/s. Navrang Roadlines Private Ltd. (respondent) entered into a Trip Loan Agreement with Cholamandalam Investment and Finance Company Ltd. (appellant) on 17.04.2018, for a loan facility of Rs. 1,75,00,000. The respondent availed the loan in installments: Rs. 50,00,000 on 14.08.2018, Rs. 35,00,000 on 21.08.2018, Rs. 50,00,000 on 21.08.2018, and Rs. 40,00,000 on 01.09.2018. The respondent defaulted on repayment, owing Rs. 1,96,06,986.08 as of 15.05.2019. The appellant invoked Section 9 of the Arbitration and Conciliation Act, 1996, filing Application No. 3703 of 2019 to prohibit garnishees from making payments to the respondent. The court prohibited garnishees from making payments and directed them to deposit amounts. Garnishee No. 5 (M/s. Havells India Limited)

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## Issues and analysis

### Issue 1: Whether the proceedings initiated under the Insolvency and Bankruptcy Code, 2016 can replace the …

**Ratio:** Section 53(1) of the Insolvency and Bankruptcy Code, 2016, prescribes the order of

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**Reasoning:** The court reasoned that the IBC is a self-contained code, and Section 53 provides a clear

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**Interpretation:** The court interpreted Section 53(1) of the IBC to mean that the distribution of

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**Application:** In this case, the appellant, being an unsecured financial creditor, is subject

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## Parties

- **Judges:** T.RA…; D.KRISHNA…
- **Appellants:** Cholamandalam…
- **Respondents:** Navrang Roadlines…

## Timeline

- **2018-04-17 — Trip Loan Ag…**: M/s.Navrang Roadlines Private Ltd. entered into Trip Loan Agreement with Cholamandalam…
- **2018-08-14 — Loan Disbur…**: Rs.50,00,000/- disbursed to…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 9 — Application for initiation of corporate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-9)

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