# In the matter of KGN GENERAL TRADING CO. LIMITED

> NCLT judgment dated 2025-11-07. Citation: TCN-2025-NCLT-01588. The case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 7 Nov 2025
- **Citation:** TCN-2025-NCLT-01588
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/kgn-general-trading-co-limited-0903e3c1

## Summary

### Background

The case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 by Mr. Sahil Jain, Proprietor of M/s White Star Hosiery (Financial Creditor), against KGN General Trading Co. Limited (Corporate Debtor) for initiation of Corporate Insolvency Resolution Process (CIRP).

## Facts

Mr. Sahil Jain, Proprietor of M/s White Star Hosiery, filed an application under Section 7 of the IBC against KGN General Trading Co. Limited.

The Financial Creditor disbursed Rs. 1,60,00,000/- to the Corporate Debtor during the financial year 2024-25.

The Corporate Debtor defaulted on repayment of the loan amount.

A Loan Agreement was executed between the parties on 10.04.2025, stipulating repayment in ten equal monthly installments with 18% interest.

The Financial Creditor issued a Loan-cum-Recall Notice on 06.05.2025, demanding immediate repayment.

The Corporate Debtor contended that the default was due to financial distress and market recession.

The Corporate Debtor admitted to receiving financial assistance from the Financial Creditor.

…

## Issues and analysis

### Issue 1: Whether there exists a financial …

**Ratio:** The Tribunal observed that the existence of a financial transaction between the Financial

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**Reasoning:** Documentary evidence, including bank transfer details and the Loan Agreement, supported

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**Interpretation:** The Tribunal interpreted the evidence as establishing the existence of a

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**Application:** The Tribunal applied the provisions of Section 7 of the IBC, which allows for

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## Parties

- **Judges:** KHETRABASI…; KAUSHALENDRA…
- **Appellants:** Sahil…
- **Respondents:** KGN General…
- **Other parties:** NIKHIL SA…
- **Advocates:** Deepika…; Shiv Pa…

## Timeline

- **2025-05-01 — Date of D…**: The date of default, as mentioned in…
- **2024-05-14 — Multiple Tran…**: Multiple transactions between…

## 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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