# In the matter of Jashank Impex Private Limited C.P. (IB) 175-NCLT-AHM-2020

> NCLT judgment dated 2021-08-02. Citation: TCN-2021-NCLT-01524. Drip Capital Inc. filed an application under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 2 Aug 2021
- **Citation:** TCN-2021-NCLT-01524
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/jashank-impex-private-limited-cp-ib-175-nclt-ahm-2020-967a5c51

## Summary

### Background

Drip Capital Inc. filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against Janshank Impex Private Limited, the Corporate Debtor. The application was based on a default of USD 2,00,000, with the date of default stated as 20.01.2020. Drip Capital Inc. had disbursed USD 2,00,000 to Janshank Impex Private Limited towards assignment of two invoices, pursuant to a term sheet letter dated 24.07.2019 and a Full Recourse Purchase and Security Agreement dated 10.09.2019. Drip Capital Inc. claimed that Janshank Impex Private Limited was liable to pay the financial debt along with accrued interest and charges if the buyers of the goods failed to pay Drip Capital Inc. on the invoice due

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## Facts

Drip Capital Inc., a financial creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Janshank Impex Private Limited, the corporate debtor. The application was based on a default of USD 2,00,000, with the date of default stated as 20.01.2020. Drip Capital Inc. had disbursed USD 2,00,000 to Janshank Impex Private Limited towards assignment of two invoices, pursuant to a term sheet letter dated 24.07.2019 and a Full Recourse Purchase and Security Agreement dated 10.09.2019. Drip Capital Inc. claimed that Janshank Impex Private Limited was liable to pay the financial debt along with accrued interest and charges if the buyers of the goods failed to pay Drip Capital Inc.

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## Issues and analysis

### Issue 1: Whether Drip Capital Inc. is a Financial …

**Ratio:** The basic conditions of Section 7 of the IBC, 2016, require that there should be a debt

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**Reasoning:** The NCLT considered the submissions of both parties and the material on record. The NCLT

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**Interpretation:** Section 7 of the IBC allows a financial creditor to initiate CIRP against a

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**Application:** The NCLT determined that Drip Capital Inc. met the criteria of a financial

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## Parties

- **Judges:** Madan B.…; Virendra Kumar…
- **Appellants:** Drip Capit…
- **Respondents:** Janshank Impex…; Jashank Impex Pvt…

## Timeline

- **2019-07-24 — Term Sheet…**: Term sheet letter executed between Drip Capital…
- **2019-09-10 — Full Recourse Purchase…**: Full Recourse Purchase and Security Agreement executed between Drip Capital Inc. and…

## 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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