# In the matter of Ajit Solar Private Limited CP(IB)-69-7-JPR-2019

> NCLT judgment dated 2019-04-26. Citation: TCN-2019-NCLT-03665. JFC Finance (India) Limited filed an application against Ajit Solar Private Limited under…

- **Court:** NCLT
- **Order date:** 26 Apr 2019
- **Citation:** TCN-2019-NCLT-03665
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/ajit-solar-private-limited-cpib-69-7-jpr-2019-df3b75eb

## Summary

### Background

JFC Finance (India) Limited filed an application against Ajit Solar Private Limited under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of the Corporate Insolvency Resolution Process (CIRP). The application was based on the corporate debtor's default in repayment of a loan amount. JFC Finance claimed to be a non-banking financial company, while Ajit Solar was a private limited company. A loan facility agreement was entered into on 05.12.2018, where JFC Finance disbursed Rs. 30,00,000 to Ajit Solar, with an interest rate of 18% p.a. and a penal interest of 1% p.m. The loan was to be repaid in 12 fortnightly installments. The corporate debtor defaulted on payments, and cheques issued were dishonored.

## Facts

JFC Finance (India) Limited, a non-banking financial company, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Ajit Solar Private Limited, a private limited company. A loan facility agreement was executed on 05.12.2018, where JFC Finance disbursed Rs. 30,00,000 to Ajit Solar. The loan carried an interest rate of 18% per annum and a penal interest of 1% per month, repayable in 12 fortnightly installments. Ajit Solar defaulted on payments, and a cheque dated 20.01.2019 for Rs. 2,62,439 was dishonored on 24.01.2019 due to 'Insufficient Funds'. JFC Finance issued a letter on 25.01.2019 requesting payment, but Ajit Solar expressed inability to pay due to a shortage of funds. Another cheque was dishonored, and JFC Finance demanded

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## Issues and analysis

### Issue 1: Whether the application filed by JFC Finance (India) Limited under Section 7 of the Insolvency and …

**Ratio:** Section 7 of the Insolvency and Bankruptcy Code, 2016, allows a financial creditor to

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**Reasoning:** The court considered the documents and averments presented by JFC Finance, including the

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**Interpretation:** Section 7 provides a mechanism for financial creditors to recover their dues

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**Application:** The court applied Section 7 to the facts of the case, finding that JFC Finance

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## Parties

- **Judges:** DEEPTI M…
- **Appellants:** JFC FINANCE…
- **Respondents:** Ajit Solar…
- **Advocates:** Anuroop S…; Javed…

## Timeline

- **2018-05-28 — Loan Disbur…**: Loan amount of Rs. 30,00,000/- was…
- **2018-12-05 — Loan Facility…**: Loan Facility Agreement dated 05.12.2018, whereby a loan amount of Rs. 30,00,000/- was…

## 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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