# In the matter of Govindam Metals and Alloys Private Limited CP (IB) - 3634-I&B-MB-2019

> NCLT judgment dated 2020-01-17. Citation: TCN-2020-NCLT-02294. The case involves a company petition filed by Kamlesh Satish Agarwal, proprietor of Meera…

- **Court:** NCLT
- **Order date:** 17 Jan 2020
- **Citation:** TCN-2020-NCLT-02294
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/govindam-metals-and-alloys-private-limited-cp-ib-3634-ib-mb-2019-746ce408

## Summary

### Background

The case involves a company petition filed by Kamlesh Satish Agarwal, proprietor of Meera Tradelinks, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against Govindam Metals & Alloys Private Limited, the Corporate Debtor, under Section 7 of the Insolvency and Bankruptcy Code, 2016. The basis for the petition is the Corporate Debtor's alleged breach of a loan agreement by defaulting on repayment.

## Facts

Kamlesh Satish Agarwal, proprietor of Meera Tradelinks, filed a company petition against Govindam Metals & Alloys Private Limited (Corporate Debtor) under Section 7 of the Insolvency and Bankruptcy Code, 2016. A business loan of Rs. 25,00,000/- was provided to the Corporate Debtor with an interest rate of 12% p.a. based on a loan agreement dated 2014-05-12 between Late Shri. Lalchand Agrawal (Grandfather of the petitioner) and the Corporate Debtor. The loan was disbursed in two tranches: Rs. 15,00,000/- on 2014-05-02 and Rs. 10,00,000/- on 2014-05-08. The Corporate Debtor repaid Rs. 1,31,700/-, leaving Rs. 23,68,300/- outstanding. Interest up to 2019-09-30 amounted to Rs. 20,37,089/-, bringing the total default to Rs. 44,05,389/-. The Corporate Debtor, in a letter

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## Issues and analysis

### Issue 1: Whether the petition fulfills the requirements for admission 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 found that the petitioner had submitted sufficient documents, including the

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**Interpretation:** Section 7 requires the financial creditor to demonstrate that a debt exists and

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**Application:** The court applied the ratio to the facts by examining the loan agreement,

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## Parties

- **Judges:** Bhaskara Pantula…; Shyam Babu…
- **Appellants:** Kamlesh Satish…
- **Respondents:** Govindam Metals &…

## Timeline

- **2014-05-12 — Loan Agre…**: Loan agreement entered into between Late Shri.…
- **2014-05-02 — First Loan Dis…**: Rs. 15,00,000/- disbursed…

## 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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