# In the matter of Asveens Forging Private Limited CP-195-(IB)-CB-2018

> NCLT judgment dated 2018-07-06. Citation: TCN-2018-NCLT-01185. The case involves a company petition filed by Shri. S. Shanmuganathan (Financial Creditor)…

- **Court:** NCLT
- **Order date:** 6 Jul 2018
- **Citation:** TCN-2018-NCLT-01185
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/asveens-forging-private-limited-cp-195-ib-cb-2018-a46f2a37

## Summary

### Background

The case involves a company petition filed by Shri. S. Shanmuganathan (Financial Creditor) against M/s. Asveens Forging Private Limited (Corporate Debtor) under Section 7 of the Insolvency and Bankruptcy Code, 2016. The Financial Creditor extended a loan of Rs. 7,00,000 to the Corporate Debtor, which was acknowledged. A Board Resolution and Demand Promissory note were executed, stipulating a 15% interest rate and a 36-month repayment period commencing from 18.10.2010 and terminating on 17.10.2013. The Corporate Debtor failed to make the payment as per the Promissory note. The Corporate Debtor requested an extension of the loan period, which the Financial Creditor accepted. However, the Corporate Debtor still failed to repay the principal amount with interest, totaling

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## Facts

Shri. S. Shanmuganathan, the Financial Creditor, extended a loan of Rs. 7,00,000 to M/s. Asveens Forging Private Limited, the Corporate Debtor. The loan was documented via DD No. 388586, drawn at Corporation Bank, Madurai. The Corporate Debtor acknowledged receipt of the loan. A Board Resolution dated 14.10.2010 and a Demand Promissory note dated 18.10.2010 were executed, specifying a 15% per annum interest rate and a 36-month repayment period from 18.10.2010 to 17.10.2013. The Corporate Debtor failed to make payments as per the promissory note. The Corporate Debtor requested a 3-year extension due to business slump, which the Financial Creditor granted. Despite the extension, the Corporate Debtor failed to repay the principal and interest, totaling Rs. 14,35,000 as of

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor defaulted on its …

**Ratio:** A default occurs when a debt has become

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**Reasoning:** The Adjudicating Authority found that the Corporate Debtor failed to repay the loan

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**Interpretation:** The interpretation of 'default' under the I&B Code encompasses the failure

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**Application:** The Corporate Debtor's failure to repay the loan, despite the extension,

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## Parties

- **Judges:** K. Anantha…; S. VIJAYARA…
- **Appellants:** Shri. S. Shanmugan…
- **Respondents:** M/s. Asveens…

## Timeline

- **2010-10-18 — Loan Agre…**: The Petitioner and Respondent…
- **2010-10-14 — Board Reso…**: Corporate Debtor…

## 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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