# In the matter of Kingston Paptech Pvt. Ltd. CP (IB) No. 543-7-NCLT-AHM-2018

> NCLT judgment dated 2021-03-15. Citation: TCN-2021-NCLT-02698. The application was filed by Krishna Paper Trading Co. (Financial Creditor) under Section 7 of…

- **Court:** NCLT
- **Order date:** 15 Mar 2021
- **Citation:** TCN-2021-NCLT-02698
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/kingston-paptech-pvt-ltd-cp-ib-no-543-7-nclt-ahm-2018-9f744b67

## Summary

### Background

The application was filed by Krishna Paper Trading Co. (Financial Creditor) under Section 7 of the Insolvency & Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Kingston Paptech Pvt. Ltd. (Corporate Debtor). The basis for the application was the Corporate Debtor's alleged default in paying a financial debt of Rs. 37,10,972/-. The date of default was stated as 14-07-2015. The Financial Creditor claimed to have given a loan of Rs. 52,50,000/- to the Corporate Debtor, payable on demand. The Corporate Debtor had allegedly paid Rs. 30,00,000/-, leaving a balance of Rs. 22,50,000/- plus interest unpaid.

## Facts

Krishna Paper Trading Co. (Financial Creditor), a proprietary concern, filed an application under Section 7 of the Insolvency & Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Kingston Paptech Pvt. Ltd. (Corporate Debtor). The Financial Creditor claimed that it had given a loan of Rs. 52,50,000/- to the Corporate Debtor, payable on demand. The Corporate Debtor allegedly defaulted on a payment of Rs. 37,10,972/- with the date of default being 14-07-2015. The Corporate Debtor had repaid Rs. 30,00,000/-, leaving a balance of Rs. 22,50,000/- plus interest unpaid. The Corporate Debtor raised technical defenses, arguing that a proprietary firm cannot file an application under the IBC and that the certificate issued by the

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## Issues and analysis

### Issue 1: Whether a proprietary firm can file an application under Section 7 of the Insolvency & …

**Ratio:** Hon'ble NCLAT in the case of Neeta Saha v. Ram Niwas Gupta 191(IBC)156/2020 has held that

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**Reasoning:** The court relied on the NCLAT's decision in Neeta Saha v. Ram Niwas Gupta, which

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**Interpretation:** This interpretation clarifies the eligibility criteria for initiating CIRP,

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**Application:** The court applied the ratio of Neeta Saha v. Ram Niwas Gupta to the present

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## Parties

- **Judges:** Madan B.…; Virendra Kumar…
- **Respondents:** Kingston Paptech…

## Timeline

- **2015-07-14 — Date of D…**: The date of default in paying the…
- **2021-03-03 — Order Res…**: Order Reserved on 3rd…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 19 — Personnel to extend co-operation to interim…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-19)

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