# In the matter of Bansidhar Agarwalla & Co. Pvt. Ltd. C.P. (IB) No. 1309-KB-2019

> NCLT judgment dated 2020-03-18. Citation: TCN-2020-NCLT-01477. The case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 18 Mar 2020
- **Citation:** TCN-2020-NCLT-01477
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/bansidhar-agarwalla-co-pvt-ltd-cp-ib-no-1309-kb-2019-79d75663

## Summary

### Background

The case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 by Apundarik Merchants Private Limited (Financial Creditor) against Bansidhar Agarwalla & Co. Pvt. Ltd. (Corporate Debtor) for initiation of Corporate Insolvency Resolution Process (CIRP). The Financial Creditor alleged that the Corporate Debtor, being the Proprietor of Bulbulitala Cold Storage, had approached them for an Inter Corporate Deposit of Rs. 25,00,000, which was provided on August 2, 2018. While the loan was initially repaid with interest on November 29, 2018, another request for a similar deposit was made, and the Corporate Debtor issued post-dated cheques. The cheque relating to interest was cleared, but the cheque for the principal loan amount was

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## Facts

Apundarik Merchants Private Limited (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 against Bansidhar Agarwalla & Co. Pvt. Ltd. (Corporate Debtor). The Corporate Debtor, proprietor of Bulbulitala Cold Storage, allegedly requested an Inter Corporate Deposit of Rs. 25,00,000 from the Financial Creditor. The initial loan was repaid with interest. Subsequently, another request for a similar deposit was made at 15% p.a. for 181 days. The Corporate Debtor issued post-dated cheques. The cheque for the interest amount was cleared, but the cheque for the principal loan amount was dishonored on May 29, 2019. The Financial Creditor proposed Ms. Beena Jajodia as the Interim Resolution Professional. The Corporate Debtor

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## Issues and analysis

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

**Ratio:** A corporate debtor cannot be held liable for debts incurred by a separate entity, even if

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**Reasoning:** The court reasoned that the documents on record, including the letter and cheques, were

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**Interpretation:** Section 7 of the IBC requires a direct financial debt owed by the corporate

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**Application:** In this case, the loan was availed by Bulbulitala Cold Storage, and the

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## Parties

- **Judges:** Jinan…; Harish Chander…
- **Appellants:** Apundarik…
- **Respondents:** Bansidhar…; Bansidhar…

## Timeline

- **2016-01-01 — Insolvency and…**: The application was filed under Section 7 of…
- **2018-08-02 — Inter Corporat…**: The Corporate Debtor was provided Inter…

## 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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