# Iin the matter of A.K. Power Industries Private Limited C.P. (IB) No. 1376-KB-2018

> NCLT judgment dated 2019-10-01. Citation: TCN-2019-NCLT-01110. Dewesh Auto Creative Services Private Limited, the Financial Creditor, filed an application…

- **Court:** NCLT
- **Order date:** 1 Oct 2019
- **Citation:** TCN-2019-NCLT-01110
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/iin-the-matter-of-ak-power-industries-private-limited-cp-ib-no-1376-kb-2018-fabc3e31

## Summary

### Background

Dewesh Auto Creative Services Private Limited, the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) to initiate Corporate Insolvency Resolution Process (CIRP) against A.K. Power Industries Private Limited, the Corporate Debtor, due to default in repayment of a financial debt. The Financial Creditor claimed a default amount of Rs. 58,09,635.81 along with interest. The Corporate Debtor argued that the loan agreement was forged and that the entire amount had been repaid.

## Facts

A working capital loan agreement dated December 19, 2014, was executed between Dewesh Auto Creative Services Private Limited (Financial Creditor) and A.K. Power Industries Private Limited (Corporate Debtor). The Financial Creditor provided a loan of Rs. 1,00,00,000/- to the Corporate Debtor for a period of 24 months with an interest rate of 36% per annum compounded monthly. The Corporate Debtor repaid Rs. 85,00,000/- between June 2, 2015, and September 26, 2016. The Financial Creditor claimed a default of Rs. 58,09,635.81 plus interest. A legal notice was issued on September 12, 2018, but the amount remained unpaid. The Corporate Debtor argued the loan agreement was forged and the entire amount was repaid, presenting cash transaction records without acknowledgment from

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## Issues and analysis

### Issue 1: Whether the petition 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 facts presented by the Financial Creditor, including the loan

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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 presented sufficient evidence

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## Parties

- **Judges:** Madan B.…; Virendra Kumar…
- **Appellants:** Dewesh Auto…
- **Respondents:** A.K.Power…
- **Advocates:** Arnab D…; Sourojit Da…; +5 more

## Timeline

- **2014-12-19 — Loan Agre…**: Working capital loan agreement executed between Dewesh Auto Creative Services Private…
- **2015-06-02 — Repayment Sta…**: Corporate Debtor…

## 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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