# In the matter of Abhayam Trading Ltd. CP-491-IB-CB-2017

> NCLT judgment dated 2017-05-31. Citation: TCN-2017-NCLT-00834. The case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 31 May 2017
- **Citation:** TCN-2017-NCLT-00834
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/abhayam-trading-ltd-cp-491-ib-cb-2017-3bd36587

## Summary

### Background

The case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. The applicant, Chivas Trading Pvt Ltd, provided evidence of default by the corporate debtor, Abhayam Trading Limited, confirming that a corporate debt of Rs. 26,50,000/- was outstanding as of March 31, 2017. The applicant also issued a demand notice on April 1, 2017, for payment of the outstanding amount.

## Facts

Chivas Trading Pvt Ltd, the financial creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Abhayam Trading Limited, the corporate debtor. The application was based on a default in payment of a debt amounting to Rs. 26,50,000/-, which was outstanding as of March 31, 2017. Chivas Trading Pvt Ltd had also issued a demand notice on April 1, 2017, for the outstanding amount. The applicant provided evidence of the default. The court found that the requirements of law were fulfilled, leading to the admission of the application and the commencement of the corporate insolvency resolution process (CIRP).

## Issues and analysis

### Issue 1: Whether the application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, meets …

**Ratio:** Section 7 of the Insolvency and Bankruptcy Code, 2016, read with Rule 4 of the Insolvency

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**Reasoning:** The court examined the contents of the application and the records placed on file. It

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**Interpretation:** Section 7 of the IBC is interpreted to mean that if a financial creditor

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**Application:** In this case, the applicant, Chivas Trading Pvt Ltd, provided evidence

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## Parties

- **Judges:** K. Anantha…; CH. MOHD SHARIEF…
- **Appellants:** CHIVAS TRADING…
- **Respondents:** Abhayam Trading…

## Timeline

- **2017-03-31 — Debt Outst…**: Corporate debt of Rs. 26,50,000/-…
- **2017-04-01 — Demand Notice…**: Applicant issued demand notice for…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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