# In the matter of Astitva Capital Market Pvt. Ltd. (IB) 397 (ND)-2021

> NCLT judgment dated 2021-11-25. Citation: TCN-2021-NCLT-00406. The petition was filed under Section 7 of the Insolvency & Bankruptcy Code, 2016, seeking…

- **Court:** NCLT
- **Order date:** 25 Nov 2021
- **Citation:** TCN-2021-NCLT-00406
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/astitva-capital-market-pvt-ltd-ib-397-nd-2021-753df9b6

## Summary

### Background

The petition was filed under Section 7 of the Insolvency & Bankruptcy Code, 2016, seeking initiation of the Corporate Insolvency Resolution Process (CIRP) against the Respondent/Corporate debtor due to its inability to liquidate its financial debt. The applicant and corporate debtor entered into a short-term loan agreement where the loan was to be refunded within 6 months without interest, but with a 10% interest charge in case of default. The applicant disbursed Rs. 1,28,00,000/- to the corporate debtor between 2019 and 2020. The corporate debtor failed to repay the loan, leading the applicant to recall the loan amount via a demand notice.

## Facts

Mr. Hemant Kumar Gupta, the applicant/financial creditor, filed a petition against M/s Astitva Capital Market Pvt. Ltd., the respondent/corporate debtor, under Section 7 of the Insolvency and Bankruptcy Code, 2016. The applicant and the corporate debtor had a short-term loan agreement where the loan was to be refunded within 6 months without interest, but with a 10% interest charge in case of default. The applicant disbursed Rs. 1,28,00,000/- to the corporate debtor between 23.09.2019 and 18.11.2020. The corporate debtor failed to repay the loan, leading the applicant to recall the loan amount via a demand notice dated 10.05.2021. The corporate debtor admitted its inability to liquidate its debt, citing liquidity issues amounting to Rs. 7.96 Crores as on 31.03.2019 and

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## Issues and analysis

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

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

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**Reasoning:** The Adjudicating Authority observed that the application was complete, the corporate

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**Interpretation:** Section 7 provides the mechanism for a financial creditor to trigger CIRP when

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**Application:** In this case, the application was deemed complete, the corporate debtor

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## Parties

- **Judges:** DHARMINDER…; SUMITAPURKA…
- **Appellants:** Hemant Kuma…
- **Respondents:** M/s Astitva…

## Timeline

- **2019-09-23 — Loan Disbursem…**: Applicant started disbursing…
- **2020-11-18 — Loan Disburse…**: Applicant completed disbursing…

## 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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