# In the matter of Bhoruka Power Corporation Limited C.P. (IB) No. 390-BB-2019

> NCLT judgment dated 2020-06-19. Citation: TCN-2020-NCLT-01144. Kajaria Iron & Steel Co. Private Limited filed C.P. (IB) No.390/BB/2019 under Section 7 of the…

- **Court:** NCLT
- **Order date:** 19 Jun 2020
- **Citation:** TCN-2020-NCLT-01144
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/bhoruka-power-corporation-limited-cp-ib-no-390-bb-2019-44b287f1

## Summary

### Background

Kajaria Iron & Steel Co. Private Limited filed C.P. (IB) No.390/BB/2019 under Section 7 of the IBC, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Bhoruka Power Corporation Ltd. The claim was based on a default of Rs.1,17,80,822/- as of 31.10.2019, including interest, on a principal loan amount of Rs.1,00,00,000/-. The Petitioner contended that the Respondent defaulted in repaying the loan amount from August 2018 onwards. The Respondent admitted to the debt but sought additional time to repay, citing financial difficulties and the impact of the COVID-19 pandemic.

## Facts

Kajaria Iron & Steel Co. Private Limited (Petitioner/Financial Creditor) filed C.P. (IB) No.390/BB/2019 against Bhoruka Power Corporation Ltd. (Corporate Debtor/Respondent) under Section 7 of the IBC, 2016. The Petitioner claimed a default of Rs.1,17,80,822/- as of 31.10.2019, including interest, on a principal loan of Rs.1,00,00,000/-. The loan was granted through seven Inter Corporate Deposits totaling Rs.2,50,00,000/- between 15.12.2016 and 14.06.2017. The Respondent confirmed receipt of the loan and executed a Demand Promissory Note. The Petitioner stated that the loans were renewed as the Respondent was regular in interest payments, but became irregular from August 2018. The Respondent admitted the debt and sought additional time to repay, citing financial

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the IBC, 2016 for initiation of CIRP against the …

**Ratio:** The IBC, 2016 is not intended to be a substitute for a recovery forum and should not be

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**Reasoning:** The court considered the Supreme Court's observations in Mobilox Innovations Private

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**Interpretation:** The court interpreted the IBC provisions in light of the Supreme Court's

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**Application:** The court applied the ratio to the facts of the case, noting that the Corporate

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## Parties

- **Judges:** Rajeswara Rao…; Ashutosh C…
- **Appellants:** Kajaria Iron &…
- **Respondents:** Bhoruka Power…

## Timeline

- **2016-12-15 — Loan Gra…**: Loan of Rs.2,50,00,000/- granted to the Respondent vide Bank Transfer from 15.12.2016 to…
- **2018-08-01 — Default in Re…**: Respondent defaulted in repayment of the…

## 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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