# In the matter of Gajra Bevel Gears Limited C.P. (I.B) No. 532-7-NCLT-AHM-2019

> NCLT judgment dated 2020-06-12. Citation: TCN-2020-NCLT-01177. The case involves an application filed by Abhimanyu Agro Private Limited, the Financial…

- **Court:** NCLT
- **Order date:** 12 Jun 2020
- **Citation:** TCN-2020-NCLT-01177
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/gajra-bevel-gears-limited-cp-ib-no-532-7-nclt-ahm-2019-abf2f73c

## Summary

### Background

The case involves an application filed by Abhimanyu Agro Private Limited, the Financial Creditor, under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Gajra Bevel Gears Limited, the Corporate Debtor. The Financial Creditor and Corporate Debtor entered into an agreement dated 2011-08-16 for an inter-corporate loan with a 15% per annum interest rate, payable quarterly. The moratorium period was 3 years, after which the liability to repay the entire loan amount became due by 2017-06-30. The Corporate Debtor failed to repay the loan.

## Facts

Abhimanyu Agro Private Limited, the Financial Creditor, filed an application under Section 7 of the IBC to initiate CIRP against Gajra Bevel Gears Limited, the Corporate Debtor. The basis for the application is a default on an inter-corporate loan agreement dated 2011-08-16, where the Financial Creditor granted a loan to the Corporate Debtor with a 15% per annum interest rate, payable quarterly. The agreement included a 3-year moratorium period. After the moratorium, the entire loan amount became due by 2017-06-30, but the Corporate Debtor failed to repay. The outstanding amount, including interest, was Rs. 22,72,81,155.62. The Corporate Debtor acknowledged the debt and default but cited a lack of financial resources as the reason for non-repayment. The Adjudicating

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## Issues and analysis

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

**Ratio:** Section 7 of the IBC allows a financial creditor to initiate CIRP against a corporate

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**Reasoning:** The Adjudicating Authority noted that the application filed by the Financial Creditor was

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**Interpretation:** This means that the application met all the procedural and substantive

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**Application:** Since the application was complete and defect-free, the Adjudicating Authority

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## Parties

- **Judges:** Madan B.…; Virendra Kumar…
- **Appellants:** Abhimanyu Agro…
- **Respondents:** Gajra Bevel Gears…
- **Advocates:** Manoj M…; Kunal Vai…

## Timeline

- **2011-08-16 — Loan Agre…**: Financial Creditor and Corporate Debtor entered into an agreement for an inter-corporate…
- **2017-06-30 — Repayment D…**: The entire loan amount became due for…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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