# In the matter of Vishnu Oil Mill Private Ltd. Vs. Union Of India & Ors., D.B. Civil Writ Petition No. 2507/2022

> HC judgment dated 2022-07-25. Citation: TCN-2022-HC-00030. Vishnu Oil Mill Private Ltd. filed a writ petition challenging the validity of Section 7 of the…

- **Court:** HC
- **Order date:** 25 Jul 2022
- **Citation:** TCN-2022-HC-00030
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/high-courts-new-delhi/vishnu-oil-mill-private-ltd-vs-union-of-india-ors-db-civil-writ-petition-no-2507-c029b03a

## Summary

### Background

Vishnu Oil Mill Private Ltd. filed a writ petition challenging the validity of Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, and the order dated 22.12.2021 passed by the National Company Law Tribunal (NCLT), Jaipur Bench, against the petitioner. The petitioner argued that the increase in the threshold limit for triggering Corporate Insolvency Resolution Process (CIRP) from Rs.1 lakh to Rs.1 crore should mean that each individual creditor must have a claim of at least Rs.1 crore for a joint application to be valid.

## Facts

Vishnu Oil Mill Private Ltd. filed a writ petition challenging the validity of Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, and the order dated 22.12.2021 passed by the National Company Law Tribunal (NCLT), Jaipur Bench. The petitioner argued that the increase in the threshold limit for triggering Corporate Insolvency Resolution Process (CIRP) from Rs.1 lakh to Rs.1 crore should mean that each individual creditor must have a claim of at least Rs.1 crore for a joint application to be valid. The petitioner relied on a press release dated 24.03.2021 issued by the Government of India regarding the increase in the threshold of default under Section 4 of the IBC. The petitioner also cited the case of Swiss Ribbons Private Ltd. & Anr. vs. Union of India

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## Issues and analysis

### Issue 1: Whether Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, requires each individual …

**Ratio:** Section 7 of the IBC, as amended, allows a group of financial creditors to converge and

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**Reasoning:** The court reasoned that the plain reading of Section 7 indicates that there is no

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**Interpretation:** The court interpreted Section 7 of the IBC to mean that a group of financial

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**Application:** The court applied this interpretation to the facts of the case and concluded

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## Parties

- **Judges:** SANDEEP…; Kuldeep M…
- **Respondents:** Vishnu Oil Mill…; Union of…
- **Other parties:** Kohi…

## Timeline

- **2020-03-24 — Press Re…**: Government of India issued a press release regarding the increase in the threshold of…
- **2020-06-05 — Gazette Notif…**: Gazette Notification dated 05.06.2020…

## 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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