# In the matter of JHV Distilleries and Sugar Mills Limited CP (IB) No. 221-KB-2018

> NCLT judgment dated 2018-05-08. Citation: TCN-2018-NCLT-01442. Rakesh Pandey, a financial creditor, filed an application under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 8 May 2018
- **Citation:** TCN-2018-NCLT-01442
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/jhv-distilleries-and-sugar-mills-limited-cp-ib-no-221-kb-2018-bb59af82

## Summary

### Background

Rakesh Pandey, a financial creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against JHV Distilleries and Sugar Mills Limited, the corporate debtor, due to default in repayment of a loan. The financial creditor claimed a default amount of Rs. 2,21,00,000/- along with interest, totaling Rs. 5,21,56,000/-. The corporate debtor argued that the funds were provided for an undefined period to revive a sick industrial unit and were a contribution towards capital, not a loan, and that there was no specified date for repayment. The financial creditor contended that the corporate debtor acknowledged the debt in its balance sheet.

## Facts

Rakesh Pandey, the financial creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against JHV Distilleries and Sugar Mills Limited, the corporate debtor. The financial creditor claimed that the corporate debtor defaulted in repaying a loan of Rs. 2,21,00,000/- along with interest at 12% per annum, totaling Rs. 5,21,56,000/-. The loan was disbursed in two tranches on 23.06.2005 and 03.01.2007. The financial creditor contended that the corporate debtor failed to repay the loan within one month as agreed. The loan amount was reflected in the balance sheet of the corporate debtor for the year ending 31.03.2012. The corporate debtor acknowledged the debt in a letter dated

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## Issues and analysis

### Issue 1: Whether the application filed by the financial creditor under Section 7 of the Insolvency and …

**Ratio:** The application is maintainable if it meets the requirements of Section 7 of the I&B

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**Reasoning:** The court considered the arguments presented by both parties and examined the relevant

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**Interpretation:** Section 7 of the I&B Code allows a financial creditor to initiate CIRP

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**Application:** The court found that the financial creditor had established the existence of a

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## Parties

- **Judges:** Jinan…; Madan B.…
- **Appellants:** Rakesh P…
- **Respondents:** JHV DISTILLERIES…

## Timeline

- **2005-06-23 — Loan Disbur…**: First tranche of loan…
- **2007-01-03 — Loan Disbur…**: Second tranche of loan…

## 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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