# In the matter of KDP Buildwell Private Limited IB-805-ND-2020

> NCLT judgment dated 2021-12-21. Citation: TCN-2021-NCLT-00112. The case involves an application filed by Mr. Raj Kumar Tyagi, the Financial Creditor, against…

- **Court:** NCLT
- **Order date:** 21 Dec 2021
- **Citation:** TCN-2021-NCLT-00112
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/kdp-buildwell-private-limited-ib-805-nd-2020-5c7f73be

## Summary

### Background

The case involves an application filed by Mr. Raj Kumar Tyagi, the Financial Creditor, against KDP Buildwell Private Limited, the Corporate Debtor, under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. The Financial Creditor claims that the Corporate Debtor approached them for financial assistance due to necessity and urgency of funds for business purposes. The Financial Creditor disbursed an unsecured loan of Rs. 1,00,00,000/- on 25.02.2015 to the Corporate Debtor at an interest rate of 18% per annum, to be repaid by 25.02.2017. The Corporate Debtor issued cheques that were later dishonored.

## Facts

Mr. Raj Kumar Tyagi, the Financial Creditor, filed an application against KDP Buildwell Private Limited, the Corporate Debtor, under Section 7 of the IBC, 2016. The Corporate Debtor approached the Financial Creditor for financial assistance due to a need for funds for business purposes. On 2015-02-25, the Financial Creditor disbursed an unsecured loan of Rs. 1,00,00,000/- to the Corporate Debtor with an 18% per annum interest rate, with a repayment deadline of 2017-02-25. The loan was disbursed through cheques. In January 2017, the Corporate Debtor issued two cheques totaling Rs. 1,00,00,000/- to the Financial Creditor. These cheques were dishonored on 2017-03-23 due to 'funds insufficient'. A legal notice was sent to the Corporate Debtor on 2017-04-17 demanding the

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor under Section 7 of the IBC, 2016 is …

**Ratio:** Section 7 of the IBC, 2016 allows a financial creditor to initiate CIRP against a

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**Reasoning:** The Adjudicating Authority perused the pleadings and heard the arguments advanced by both

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

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**Application:** In this case, the Corporate Debtor admitted its liability by issuing cheques

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## Parties

- **Judges:** BACHU VENKAT…; Narender Kumar…
- **Appellants:** Raj Kumar…
- **Respondents:** KDP Buildwell…

## Timeline

- **2015-02-25 — Loan Disbur…**: Financial Creditor disbursed an unsecured loan of Rs. 1,00,00,000/- to the Corporate…
- **2017-01-01 — Cheque Is…**: Corporate Debtor handed over two cheques totaling Rs. 1,00,00,000/- to the Financial…

## 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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