# In the matter of Innovative Studios Pvt. Limited I.A. No. 93-2020 in C.P.(IB) No. 181-BB-2018

> NCLT judgment dated 2020-03-02. Citation: TCN-2020-NCLT-01734. The case involves an application (I.A. No. 93 of 2020) filed by M/s. Rajesh Exports Limited, a…

- **Court:** NCLT
- **Order date:** 2 Mar 2020
- **Citation:** TCN-2020-NCLT-01734
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/innovative-studios-pvt-limited-ia-no-93-2020-in-cpib-no-181-bb-2018-6aece9a0

## Summary

### Background

The case involves an application (I.A. No. 93 of 2020) filed by M/s. Rajesh Exports Limited, a financial creditor, in an ongoing corporate insolvency resolution process (CIRP) against M/s. Innovative Studios Private Limited. The CIRP was initiated by M/s. Karnataka State Financial Corporation under Section 7 of the IBC, 2016. The applicant sought consideration of its claim of Rs. 51,12,08,556/- as of 11.04.2019, along with interest at 24%. The Resolution Professional (RP), later the Liquidator, admitted only a portion of the claim, leading to the application for the tribunal to direct acceptance of the full claim.

## Facts

M/s. Karnataka State Financial Corporation initiated CIRP against M/s. Innovative Studios Private Limited under Section 7 of the IBC, 2016. The Adjudicating Authority admitted the petition on 2019-04-11 and appointed Mr. BaladyShekar Shetty as the IRP. Subsequently, liquidation was ordered on 2020-01-06, and the RP became the Liquidator. M/s. Rajesh Exports Limited, a financial creditor, claimed Rs. 51,12,08,556/- as of 2019-04-11, based on inter-corporate deposits (ICDs) extended to Innovative Studios, secured by mortgage deeds. The Liquidator admitted only Rs. 9,74,45,125/-, considering an interest rate of 14% and classifying the debt as unsecured, citing the Karnataka Prohibition of Charging Exorbitant Interest Act, 2004, and the Karnataka Money Lenders Act, 1961.

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## Issues and analysis

### Issue 1: Whether the claim of M/s. Rajesh Exports Limited should be considered as a secured debt or an …

**Ratio:** The classification of a debt as secured or unsecured depends on whether a valid security

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**Reasoning:** The court considered the arguments of both parties regarding the existence and validity

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**Interpretation:** The interpretation of whether a security interest exists involves examining the

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**Application:** The court directed Rajesh Exports to submit a representation to the Liquidator

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## Parties

- **Judges:** Rajeswara Rao…; Ashutosh C…
- **Appellants:** M/s. Rajesh…
- **Respondents:** M/s. Innovative…; BaladyShekar…

## Timeline

- **2018-01-01 — CP(IB) No. 181…**: Case number assigned to the…
- **2018-01-01 — Inter-Corporate…**: M/s. Rajesh Exports Limited extended ICDs to M/s. Innovative Studios Private Limited,…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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