# In the matter of GMV Agencies Private Limited C.P. (IB) No. 4353-NCLT-MB-2018

> NCLT judgment dated 2019-09-18. Citation: TCN-2019-NCLT-01395. Shriram City Union Finance Limited filed an application under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 18 Sept 2019
- **Citation:** TCN-2019-NCLT-01395
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/gmv-agencies-private-limited-cp-ib-no-4353-nclt-mb-2018-a7a19985

## Summary

### Background

Shriram City Union Finance Limited filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against GMV Agencies Private Limited, seeking initiation of the Corporate Insolvency Resolution Process (CIRP). The application was based on a default of ₹41,51,603/- related to a loan agreement. The applicant and corporate debtor entered into an agreement for financial assistance of ₹30,00,000/- vide Loan Agreement No. CDBDRTF1610070015 dated 07.10.2016. The loan was to be repaid in 24 EMIs from 05.11.2016 to 05.10.2018. The corporate debtor defaulted after making initial payments, and the cheques issued were dishonored.

## Facts

Shriram City Union Finance Limited (the Applicant) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (I&B Code) against GMV Agencies Private Limited (the Corporate Debtor) for initiating Corporate Insolvency Resolution Process (CIRP). The application was based on a default of ₹41,51,603/-. The Applicant and Corporate Debtor entered into a loan agreement for ₹30,00,000/- (Loan Agreement No. CDBDRTF1610070015 dated 07.10.2016). The loan was to be repaid in 24 EMIs from 05.11.2016 to 05.10.2018. The Corporate Debtor defaulted after making initial payments, and the issued cheques were dishonored. The Applicant issued a Demand-cum-Insolvency Notice dated 03.10.2018, but the Corporate Debtor did not reply. The last payment made by the

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the I&B Code, 2016, for initiating CIRP against the …

**Ratio:** Section 7 of the I&B Code, 2016, allows a financial creditor to initiate CIRP against

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**Reasoning:** The court found that the application was complete and filed under the proper form. The

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**Interpretation:** Section 7 of the I&B Code provides the mechanism for a financial creditor

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**Application:** The court applied Section 7 to the facts of the case, noting that the

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## Parties

- **Judges:** Mr V. P.…; Mr Rajesh…
- **Appellants:** Shriram City…
- **Respondents:** Gmv Agencies…
- **Advocates:** Amiy K…

## Timeline

- **2016-10-07 — Loan Agre…**: Applicant and Corporate Debtor entered into a loan agreement for ₹30,00,000/- (Loan…
- **2016-11-05 — EMI Start…**: The loan was to be repaid in 24…

## 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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