# In the matter of Hytone Merchants Private Limited Vs. Satabadi Investment Consultants
Private Limited, Company Appeal (AT) (Insolvency) No. 258 of 2021

> NCLAT judgment dated 2021-06-30. Citation: TCN-2021-NCLAT-00216. The case involves an appeal against an order dated 2nd February 2021, passed by the…

- **Court:** NCLAT
- **Order date:** 30 Jun 2021
- **Citation:** TCN-2021-NCLAT-00216
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/hytone-merchants-private-limited-vs-satabadi-investment-consultants-private-limi-59ac6311

## Summary

### Background

The case involves an appeal against an order dated 2nd February 2021, passed by the Adjudicating Authority/National Company Law Tribunal, Kolkata Bench, which rejected an application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC). The appellant, Hytone Merchants Private Limited, had extended an unsecured loan of Rs. 3 lakhs to the respondent, Satabadi Investment Consultants Private Limited, carrying an interest of 15% per annum. When the respondent defaulted on repayment, the appellant filed a Section 7 application, which was dismissed by the Adjudicating Authority on the grounds that the petition appeared to be filed in collusion with the corporate debtor, considering the corporate debtor's financial position and guarantees extended.

## Facts

Hytone Merchants Private Limited (Appellant) extended an unsecured loan of Rs. 3 lakhs to Satabadi Investment Consultants Private Limited (Respondent/Corporate Debtor) on 15th February 2019, with an interest rate of 15% per annum for six months. The Respondent acknowledged the debt and issued a demand promissory note but defaulted on repayment. The Appellant issued a demand notice on 16th October 2019, recalling the loan. The Appellant then filed a Section 7 application under the Insolvency and Bankruptcy Code, 2016, which was rejected by the Adjudicating Authority/National Company Law Tribunal, Kolkata Bench. The Adjudicating Authority observed that the Corporate Debtor had a substantial net worth (Rs. 15,36,39,015) and had given a corporate guarantee of Rs.

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## Issues and analysis

### Issue 1: Whether the petition complying with all requirements of Section 7(5) of the Insolvency and …

**Ratio:** Section 7(5) of the IBC provides that where the Adjudicating Authority is satisfied that

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**Reasoning:** The court reasoned that even if a Section 7 application meets all the requirements of the

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**Interpretation:** The interpretation of Section 7(5) and Section 65 of the IBC suggests that

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**Application:** In this case, the Adjudicating Authority observed that the Corporate Debtor had

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## Parties

- **Judges:** V. P. S…
- **Appellants:** Hytone Merchants…
- **Respondents:** Satabadi Investmen…

## Timeline

- **2019-02-15 — Loan Disbur…**: Appellant extended an unsecured loan…
- **2019-10-16 — Demand N…**: Appellant issued a demand notice to the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 75 — Punishment for false information furnished in…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-75)

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