# In the matter of Ratnakar Sharma vs. Aditya Birla Finance Ltd. & Anr.

> NCLAT judgment dated 2024-08-02. Citation: TCN-2024-NCLAT-00284. This is an appeal against an order dated 31.10.2023 passed by the National Company Law…

- **Court:** NCLAT
- **Order date:** 2 Aug 2024
- **Citation:** TCN-2024-NCLAT-00284
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/ratnakar-sharma-vs-aditya-birla-finance-ltd-anr-438e0682

## Summary

### Background

This is an appeal against an order dated 31.10.2023 passed by the National Company Law Tribunal (NCLT), Court-IV, in C.P. (IB) No.- 685/2022, which admitted a Section 7 application filed by Aditya Birla Finance Limited, the Financial Creditor. The appellant claimed readiness to pay defaulted EMIs with interest within two weeks. An interim order was passed by the Tribunal on 10.11.2023, preventing the constitution of the Committee of Creditors (CoC). However, the appellant failed to deposit the amount, leading to the vacation of the interim order. The appellant challenged the order, arguing that the Loan Recall Notice was invalid because it was not in accordance with the Loan Agreement and there was no event of default.

## Facts

Ratnakar Sharma filed an appeal against the order dated 31.10.2023 passed by the National Company Law Tribunal (NCLT), Court-IV, in C.P. (IB) No.- 685/2022, which admitted a Section 7 application filed by Aditya Birla Finance Limited. The appellant claimed readiness to pay defaulted EMIs with interest within two weeks. The Tribunal passed an interim order on 10.11.2023, preventing the constitution of the Committee of Creditors (CoC), but the appellant failed to deposit the amount, leading to the vacation of the interim order. The appellant challenged the order, arguing that the Loan Recall Notice was invalid because it was not in accordance with the Loan Agreement and there was no event of default. The respondent argued that the Loan Recall Notice was valid because the

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## Issues and analysis

### Issue 1: Whether the Loan Recall Notice issued by the Financial Creditor was invalid because it was not in …

**Ratio:** The legal principle is that a Loan Recall Notice must be in accordance with the Loan

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**Reasoning:** The NCLAT reasoned that the co-borrower of the Corporate Debtor itself sent a letter to

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**Interpretation:** The legal issue concerns the validity of a Loan Recall Notice and whether it

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**Application:** The NCLAT applied the ratio to the facts of the case and found that the Loan

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## Parties

- **Judges:** Ashok Bh…; Barun M…; +1 more
- **Appellants:** Ratnakar…
- **Respondents:** Aditya Birla…

## Timeline

- **2022-01-02 — Letter to National…**: The co-borrower of the Corporate Debtor sent a letter to the National Stock Exchange of…
- **2022-05-24 — Loan Recall…**: The Financial Creditor…

## 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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