# In the matter of Atharva Advisory Services Private Limited CP (IB) -2488-I&BP-MB-2018

> NCLT judgment dated 2018-11-27. Citation: TCN-2018-NCLT-00283. Global Rural Netco Limited filed a petition under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 27 Nov 2018
- **Citation:** TCN-2018-NCLT-00283
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/atharva-advisory-services-private-limited-cp-ib-2488-ibp-mb-2018-696fc637

## Summary

### Background

Global Rural Netco Limited filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against Atharva Advisory Services Private Limited, the Corporate Debtor. The basis for the petition was the Corporate Debtor's default on a loan. The Petitioner had sanctioned a loan to the Corporate Debtor for working capital, and a loan agreement was executed. The Corporate Debtor defaulted on repayment, leading to the petition.

## Facts

Global Rural Netco Limited (Petitioner) sought to initiate Corporate Insolvency Resolution Process (CIRP) against Atharva Advisory Services Private Limited (Corporate Debtor) due to a default on loan repayment. The Petitioner had sanctioned a loan of Rs. 4,00,00,000/- to the Corporate Debtor for working capital, based on a request dated 2017-06-20. A loan agreement was executed on 2017-06-30. The loan was to be repaid within 9 months with a 6% per annum interest rate. The Petitioner disbursed the loan on 2017-07-03, which was acknowledged by the Corporate Debtor on 2017-07-05. The Corporate Debtor confirmed a balance of Rs. 4,00,00,000/- as of 2018-03-31. The Petitioner recalled the loan via letter dated 2018-04-13, but the Corporate Debtor failed to repay. The

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor committed a default in repaying the loan to the Petitioner, thereby …

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

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**Reasoning:** The Adjudicating Authority, upon reviewing the documents, found that the Corporate Debtor

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

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**Application:** The Corporate Debtor's failure to repay the loan, as evidenced by the loan

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## Parties

- **Judges:** Bhaskara Pantula…; V. Nallasen…
- **Appellants:** Global Rural…
- **Respondents:** Atharva Advisory…

## Timeline

- **2017-06-20 — Petitioner's…**: Petitioner requested a loan for…
- **2017-06-30 — Loan Agre…**: Loan agreement executed…

## 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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