# In the matter of Kanoi Plantations Private Limited C.P (IB) No.1497-KB-2018

> NCLT judgment dated 2021-11-25. Citation: TCN-2021-NCLT-00413. The case involves an application under Section 7 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 25 Nov 2021
- **Citation:** TCN-2021-NCLT-00413
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/kanoi-plantations-private-limited-cp-ib-no1497-kb-2018-ff3baa36

## Summary

### Background

The case involves an application 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. The application was filed by Cynosure Mercantile Private Limited, Dream Estate & Holding Private Limited, and Deekay Properties Private Limited (the Financial Creditors) against Kanoi Plantations Private Limited (the Corporate Debtor) seeking initiation of the corporate insolvency resolution process (CIRP). The Financial Creditors claimed that the Corporate Debtor defaulted on an unsecured loan of Rs. 80,00,000/- granted in 2012-13. The Corporate Debtor made some part payments until March 31, 2014, but the remaining amount remained unpaid. The Financial Creditors issued a

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## Facts

In 2012-13, Cynosure Mercantile Private Limited, Dream Estate & Holding Private Limited, and Deekay Properties Private Limited (Financial Creditors) granted an unsecured loan of Rs. 80,00,000/- to Kanoi Plantations Private Limited (Corporate Debtor). The Corporate Debtor made quarterly interest payments until March 31, 2014, but the principal and remaining interest remained unpaid. The individual loan amounts were Rs. 20,00,000/-, Rs. 10,00,000/-, and Rs. 50,00,000/- respectively. On 29/07/2017, the Financial Creditors sent a notice to the Corporate Debtor requesting payment, which was followed by a reply from the Corporate Debtor on 11/08/2017. A Memorandum of Understanding (MoU) was signed on 28/08/2017, but the cheques issued by the Corporate Debtor were

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditors 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 documents placed on record by both parties and was satisfied

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

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**Application:** The court applied Section 7 and the definition of default to the facts of the

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## Parties

- **Judges:** Rajasekha…; Harish Chander…
- **Appellants:** Cynosure Mercantil…
- **Respondents:** Kanoi Plantations…

## Timeline

- **2012-01-01 — Loan Disbur…**: Financial Creditors disbursed an unsecured loan of Rs. 80,00,000/- to the Corporate…
- **2014-03-31 — Cessation of Interest…**: Corporate Debtor stopped making…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 3(12) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-3)

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