# In the matter of KG Corporation Limited C.P. No. (IB) 271-7-NCLT-AHM-2019

> NCLT judgment dated 2020-11-09. Citation: TCN-2020-NCLT-00279. The case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 9 Nov 2020
- **Citation:** TCN-2020-NCLT-00279
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/kg-corporation-limited-cp-no-ib-271-7-nclt-ahm-2019-c76dc475

## Summary

### Background

The case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, by five financial creditors against K.G. Corporation Limited, the corporate debtor, seeking initiation of the corporate insolvency resolution process. The applicants claim that the corporate debtor has defaulted on a total amount of Rs. 10,03,95,000/-. The application was filed due to the corporate debtor's inability to repay the outstanding debt.

## Facts

Five financial creditors, including Acrow Construction Pvt Ltd, Eloquent Traders P. Ltd, Glean Trading P. Ltd, Tanvish Trading P. Ltd, and Vignaharta Corrugators P.LTD, filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against K.G. Corporation Limited, the corporate debtor. The financial creditors claimed that the corporate debtor had defaulted on a total amount of Rs. 10,03,95,000/-. As of 28.02.2019, the amount due was Rs. 28,62,04,356/-. The corporate debtor had not disputed the debt owed or the default committed. The financial creditors submitted documents, including demand promissory notes, financial contracts, and banker's book entries, to support their claim. The respondent filed an affidavit admitting the debt. The date of default

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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 found that the applicants were financial creditors and that the corporate

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**Interpretation:** Section 7 provides a mechanism for financial creditors to recover their dues

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**Application:** The court applied Section 7 to the facts of the case and found that the

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## Parties

- **Judges:** Manorama…; Chockalingam…
- **Appellants:** Acrow Construction…
- **Respondents:** K.G. Corporation…; K.G. Corporation…

## Timeline

- **2012-06-04 — Incorporation of…**: K.G. Corporation Limited…
- **2017-09-30 — Date of Default for…**: Date of default for Acrow…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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