# In the matter of Priyal Kantilal Patel vs. IREP Credit Capital Pvt. Ltd. & Anr. Company Appeal (AT) (Insolvency) No. 1423 of 2022 & I.A. No. 4457 of 2022

> NCLAT judgment dated 2023-02-01. Citation: TCN-2023-NCLAT-00752. The case involves an appeal against an order dated 2022-10-10, where the Adjudicating…

- **Court:** NCLAT
- **Order date:** 1 Feb 2023
- **Citation:** TCN-2023-NCLAT-00752
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/priyal-kantilal-patel-vs-irep-credit-capital-pvt-ltd-anr-company-appeal-5e7d96dd

## Summary

### Background

The case involves an appeal against an order dated 2022-10-10, where the Adjudicating Authority admitted a Section 7 application filed by the Financial Creditor under the I&B Code, 2016. An earlier company petition had consent terms where the Financial Creditor agreed to withdraw the petition, with a clause stating that in case of default by the corporate debtor, the Financial Creditor could claim the outstanding amount and revive the company petition. Subsequently, the consent terms were defaulted, and the cheques issued by the Corporate Debtor were dishonored. Instead of reviving the earlier petition, the Financial Creditor filed a fresh company petition CP (IB) No. 1029 of 2021, basing its claim on the initial financial debt.

## Facts

Priyal Kantilal Patel (Appellant) filed an appeal against an order by the Adjudicating Authority that admitted a Section 7 application filed by IREP Credit Capital Pvt. Ltd. & Anr. (Respondents/Financial Creditor) under the I&B Code, 2016. The Financial Creditor had initially filed a company petition, during which consent terms were agreed upon, and the petition was withdrawn. The consent terms stipulated that if the Corporate Debtor defaulted, the Financial Creditor could revive the petition. The Corporate Debtor defaulted, and the issued cheques were dishonored. Instead of reviving the earlier petition, the Financial Creditor filed a fresh Section 7 application. The Appellant argued that the Section 7 application was not maintainable due to the breach of

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## Issues and analysis

### Issue 1: Whether the Section 7 application filed by the Financial Creditor is maintainable despite the …

**Ratio:** The ratio is that the existence of consent terms in an earlier company petition and their

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**Reasoning:** The court reasoned that the Section 7 application was not solely based on the breach of

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**Interpretation:** The interpretation is that the breach of consent terms does not extinguish the

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**Application:** In this case, the Financial Creditor's Section 7 application was deemed

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## Parties

- **Judges:** Ashok Bh…; Barun M…
- **Appellants:** Priyal Kantilal…
- **Respondents:** IREP Credit…

## Timeline

- **2019-12-20 — CP No. 45/IBC/NCLT/MB/MA…**: An application under Section 7 was filed by…
- **2022-10-10 — Order by Adjudicating…**: The Adjudicating Authority admitted Section 7…

## 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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