# In the matter of BKM Industries Limited CP (IB) No. 2078-KB-2019

> NCLT judgment dated 2020-12-30. Citation: TCN-2020-NCLT-00006. Trimurti Associates Private Limited, the Financial Creditor, filed a petition under Section 7…

- **Court:** NCLT
- **Order date:** 30 Dec 2020
- **Citation:** TCN-2020-NCLT-00006
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/bkm-industries-limited-cp-ib-no-2078-kb-2019-ad5779d0

## Summary

### Background

Trimurti Associates Private Limited, the Financial Creditor, filed a petition under Section 7 of the Insolvency & Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against BKM Industries Private Limited, the Corporate Debtor. The petition was filed due to the Corporate Debtor's failure to repay a principal amount of ₹5,00,00,000 and interest of ₹1,14,43,046 as of 09.10.2018. The Corporate Debtor had approached the Financial Creditor for funds to meet working capital requirements, leading to a loan agreement dated 11.04.2018. The Corporate Debtor requested an extension for repayment, which was granted, but the amount remained unpaid.

## Facts

Trimurti Associates Private Limited (Financial Creditor) filed a petition under Section 7 of the Insolvency & Bankruptcy Code, 2016, against BKM Industries Private Limited (Corporate Debtor) due to a default in debt repayment. The Corporate Debtor, a listed public company, had approached the Financial Creditor for funds to meet working capital needs, resulting in a loan agreement dated 11.04.2018 for ₹5,00,00,000 with a 16% annual interest rate. The Corporate Debtor failed to repay the principal and interest, which amounted to ₹6,14,43,046 as of 09.10.2018 (the date of default). The Financial Creditor extended the repayment period upon the Corporate Debtor's request, but the debt remained unpaid. The Corporate Debtor did not file a reply to the petition despite

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor is in …

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

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**Reasoning:** The Corporate Debtor failed to repay the principal amount of ₹5,00,00,000 and interest of

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**Interpretation:** A 'default' under the IBC means non-payment of debt when whole or any part or

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

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## Parties

- **Judges:** Rajasekha…
- **Appellants:** TRIMURTI ASSOCIATE…
- **Respondents:** BKM Industries…

## Timeline

- **2017-08-16 — Board Resolution by…**: Board Resolution passed by the Corporate…
- **2018-04-11 — Loan Agre…**: Parties entered into a loan agreement which has…

## 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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