# In the matter of Kelvin Recruiters Pvt. Ltd. (IB0-671(ND)-2019

> NCLT judgment dated 2019-09-17. Citation: TCN-2019-NCLT-01425. Volkswagen Finance Pvt. Ltd., a financial creditor, filed an application under Section 7 of the…

- **Court:** NCLT
- **Order date:** 17 Sept 2019
- **Citation:** TCN-2019-NCLT-01425
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/kelvin-recruiters-pvt-ltd-ib0-671nd-2019-64bb6830

## Summary

### Background

Volkswagen Finance Pvt. Ltd., a financial creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) against Kelvin Recruiters Pvt. Ltd., the corporate debtor, for initiating the Corporate Insolvency Resolution Process (CIRP). The corporate debtor had availed loans from the financial creditor to purchase luxury vehicles but defaulted on repayments, leading to the recall of the loans. The failure to liquidate the outstanding liability prompted the financial creditor to file the application.

## Facts

Volkswagen Finance Pvt. Ltd. is a financing company that provides vehicle loans. Kelvin Recruiters Pvt. Ltd. availed loans from Volkswagen Finance Pvt. Ltd. to purchase luxury vehicles. Kelvin Recruiters Pvt. Ltd. defaulted on the repayment schedule, leading Volkswagen Finance Pvt. Ltd. to recall the loans. The outstanding amount claimed to be in default is Rs. 23,44,133.74/- inclusive of interest and other charges. Volkswagen Finance Pvt. Ltd. filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against Kelvin Recruiters Pvt. Ltd. The Corporate Debtor failed to appear in court despite being served notice. The car loan account number is 20161102548, and a sum of Rs. 24,50,000/-

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## Issues and analysis

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

**Ratio:** Section 7 of the Insolvency and Bankruptcy Code, 2016, allows a financial creditor to

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**Reasoning:** The court reasoned that the corporate debtor had defaulted on its loan repayment

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**Interpretation:** Section 7 of the IBC is interpreted to mean that if a financial creditor

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**Application:** The ratio and reasoning were applied to the facts of the case, where the

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## Parties

- **Judges:** Ina Mal…; V.K. SUB…
- **Appellants:** Volkswagen…
- **Respondents:** Kelvin Recruiters…

## Timeline

- **2016-01-01 — Loan Disbur…**: Volkswagen Finance Pvt. Ltd. disbursed a sum of Rs. 24,50,000/- to Kelvin Recruiters Pvt.…
- **N/A — Default in Re…**: Kelvin Recruiters Pvt. Ltd. defaulted on…

## 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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