# In the matter of Kay Em Copper Private Limited IB-2027(ND)-2019

> NCLT judgment dated 2021-04-19. Citation: TCN-2021-NCLT-02345. Tata Capital Financial Services Limited filed an application under Section 7 of the Insolvency…

- **Court:** NCLT
- **Order date:** 19 Apr 2021
- **Citation:** TCN-2021-NCLT-02345
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/kay-em-copper-private-limited-ib-2027nd-2019-e9a4e94e

## Summary

### Background

Tata Capital Financial Services Limited filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against Kay Em Copper Private Limited due to an alleged default of Rs. 3,14,08,827. The applicant, a Non-Banking Financial Company, claimed that the respondent, engaged in wholesale trading of copper and zinc, defaulted on a channel finance loan. The respondent denied the contents of the application, questioning the authority of the applicant's representative and alleging discrepancies in the documents.

## Facts

Tata Capital Financial Services Limited (the applicant), a Non-Banking Financial Company, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Kay Em Copper Private Limited (the respondent), a company engaged in the wholesale trading of copper and zinc. The applicant claimed that the respondent defaulted on a channel finance loan amounting to Rs. 3,14,08,827. The loan was sanctioned on 04.07.2017, with a tenure of 12 months and an interest rate of 10.5% p.a. The loan was intended for purchasing raw materials from Vedanta Limited. The applicant disbursed the loan directly to Vedanta Limited. The loan was secured by a first and exclusive charge on inventory purchased from

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## Issues and analysis

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

**Ratio:** The Adjudicating Authority is not required to determine the actual amount of claim but

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**Reasoning:** The Hon'ble NCLAT in Mr. Satyaprakash Aggarwal and Ors. v. Vistar Metal Industries

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**Interpretation:** This means that the NCLT's primary concern is to ensure that the application is

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**Application:** The Tribunal considered the documents filed by both parties and the arguments

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## Parties

- **Judges:** SHRI. P.S.N.…; V.K. SUB…
- **Appellants:** Tata Capital…
- **Respondents:** Kay Em Copper…

## Timeline

- **2017-04-07 — Sanction Lette…**: Applicant issued a sanction letter for a channel finance facility of Rs. 3,00,00,000/- to…
- **2017-08-24 — Loan Appli…**: The Respondent applied for a Channel finance Loan to the Tune of Rs. 3,00,00,000/- vide…

## 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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