# In the matter of Everest Infra Energy Ltd. CP (IB) No. 31-GB-2019

> NCLT judgment dated 2019-11-08. Citation: TCN-2019-NCLT-00664. Bazigar Trading Pvt. Ltd., a Non-Banking Financial Company, filed an application under Section…

- **Court:** NCLT
- **Order date:** 8 Nov 2019
- **Citation:** TCN-2019-NCLT-00664
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/everest-infra-energy-ltd-cp-ib-no-31-gb-2019-45c7a60c

## Summary

### Background

Bazigar Trading Pvt. Ltd., a Non-Banking Financial Company, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) to initiate Corporate Insolvency Resolution Process (CIRP) against Everest Infra Energy Ltd., the Corporate Debtor (CD). The Financial Creditor (FC) claimed that the CD had defaulted on an inter-corporate loan of Rs. 4,00,00,000.00 disbursed in several tranches during 2016-2017. The CD had approached the FC for financial assistance in July 2016, and after discussions, the FC agreed to provide the loan for a period of 12 months with 12% interest per annum.

## Facts

Bazigar Trading Pvt. Ltd. (FC), a registered Non-Banking Financial Company, engaged in money lending, provided an inter-corporate loan of Rs. 4,00,00,000.00 to Everest Infra Energy Ltd. (CD) in several tranches during 2016-2017. The loan was agreed upon in July 2016 for a period of 12 months with an interest rate of 12% per annum. The CD utilized the entire loan amount but failed to pay any interest or principal by the expiry date of August 8, 2017, and continued to default until July 31, 2019. The CD, however, deposited TDS on the gross annual interest accrued on the loan for the financial years 2016-17, 2017-18, and 2018-19, and issued confirmation of accounts acknowledging its liability. The FC issued reminder letters on August 29, 2018, January 4, 2019, March 7,

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## Issues and analysis

### Issue 1: Whether the petitioner/Financial Creditor has met the requirements under Section 7 of the …

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

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**Reasoning:** The court reasoned that the Financial Creditor (FC) had provided sufficient evidence to

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**Interpretation:** Section 7 is interpreted to mean that if a financial creditor can demonstrate a

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**Application:** The court applied this ratio to the facts by noting that the FC had provided

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## Parties

- **Judges:** Hari Venkata…
- **Appellants:** Bazigar Trading…
- **Respondents:** Everest Infra…

## Timeline

- **2016-07-01 — Loan Agre…**: Everest Infra Energy Ltd. approached Bazigar Trading Pvt. Ltd. for financial assistance,…
- **2016-08-09 — First Tranche…**: Bazigar Trading Pvt. Ltd. disbursed the first tranche of the loan amounting to Rs.…

## 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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