# In the matter of Citylife Retail Private Limited CP(IB) No.658-KB-2020

> NCLT judgment dated 2021-05-31. Citation: TCN-2021-NCLT-02061. Apundarik Merchants Private Limited filed an application under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 31 May 2021
- **Citation:** TCN-2021-NCLT-02061
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/citylife-retail-private-limited-cpib-no658-kb-2020-d3fc7ebe

## Summary

### Background

Apundarik Merchants Private Limited filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Citylife Retail Private Limited, seeking initiation of Corporate Insolvency Resolution Process (CIRP). The application was based on a default in repayment of an Inter Corporate Deposit (ICD) of Rs. 25,00,000/-. The Corporate Debtor had approached the Financial Creditor for the loan, agreeing to repay it by September 30, 2019, with 15% interest per annum. The Corporate Debtor issued a demand promissory note, a letter of undertaking, and a money receipt acknowledging the loan. However, a cheque issued for repayment was dishonored due to signature mismatch. The Financial Creditor recalled the loan and initiated proceedings under the IBC.

## Facts

Apundarik Merchants Private Limited (Financial Creditor) extended an Inter Corporate Deposit (ICD) of Rs. 25,00,000/- to Citylife Retail Private Limited (Corporate Debtor). The Corporate Debtor approached the Financial Creditor for the loan, agreeing to repay it by September 30, 2019, with 15% interest per annum. The agreement was supported by a demand promissory note dated 10.04.2019, a letter of undertaking dated 17.04.2019, and a money receipt dated 10.04.2019. The Corporate Debtor issued three cheques, including one for Rs. 25,00,000/-, towards repayment. However, the Rs. 25,00,000/- cheque was dishonored due to a signature mismatch. The Financial Creditor issued a recalling notice dated 18.01.2020, demanding repayment. The Corporate Debtor defaulted on the

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor under Section 7 of the Insolvency and …

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

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**Reasoning:** The court considered the documents and pleadings submitted by both parties, including the

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

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**Application:** The court found that the Financial Creditor had provided sufficient evidence to

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## Parties

- **Judges:** Rajasekha…; Harish Chander…
- **Appellants:** Apundarik…
- **Respondents:** Citylife Retail…

## Timeline

- **2019-04-10 — Demand Promiss…**: Corporate Debtor issued a Demand…
- **2019-04-17 — Letter of Und…**: Corporate Debtor issued a Letter of…

## 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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