# In the matter of Infiniti Metal Products India Limited IBA-451-2020

> NCLT judgment dated 2021-04-27. Citation: TCN-2021-NCLT-02273. The case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 27 Apr 2021
- **Citation:** TCN-2021-NCLT-02273
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/infiniti-metal-products-india-limited-iba-451-2020-d8fe3696

## Summary

### Background

The case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, by M/s. Bharani Commodities Private Limited against M/s. Infiniti Metal Products India Limited. The applicant, a financial creditor, sought to initiate the Corporate Insolvency Resolution Process (CIRP) against the corporate debtor, alleging a default in repaying a financial debt of Rs. 4,70,84,899/- together with interest at 12% per annum as of 10.07.2018. The financial creditor claimed to have supplied TMT steel bars and angles to the corporate debtor, who failed to make payments. Subsequently, both parties agreed to convert a portion of the debt (Rs. 3,95,67,142)

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## Facts

M/s. Bharani Commodities Private Limited (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s. Infiniti Metal Products India Limited (Corporate Debtor). The Financial Creditor claimed that the Corporate Debtor defaulted on a financial debt of Rs. 4,70,84,899/- with 12% interest per annum as of 10.07.2018. The Financial Creditor supplied TMT steel bars and angles to the Corporate Debtor, who failed to pay for the materials. On 20.06.2018, both parties agreed to convert Rs. 3,95,67,142 of the debt into an unsecured loan with 9% interest per annum, documented in a loan agreement. The Corporate Debtor defaulted on the loan payments. The Financial

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016, for initiating …

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

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**Reasoning:** The Adjudicating Authority considered the application filed by M/s. Bharani Commodities

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**Interpretation:** Section 7 of the IBC provides a mechanism for financial creditors to recover

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**Application:** The Financial Creditor's application was found to be in compliance with Section

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## Parties

- **Judges:** R. Sucha…; B. Anil…
- **Respondents:** M/s. Infiniti…; Shri. A.G.…
- **Advocates:** Shri. Rohan…; Shri. Ganesh V…; +1 more

## Timeline

- **2018-06-20 — Loan Agre…**: Both parties decided to convert Rs. 3,95,67,142 into an unsecured loan with interest at…
- **2018-07-10 — Default…**: Financial debt of Rs. 4,70,84,899/- with 12%…

## 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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