# In the matter of Kishori Lal Sudesh Kumar Metals Pvt. Ltd. CP No. (IB)-276-7-JPR-2019

> NCLT judgment dated 2020-01-30. Citation: TCN-2020-NCLT-02131. The case involves an application filed by Shri Raghav Aggarwal, claiming to be a Financial…

- **Court:** NCLT
- **Order date:** 30 Jan 2020
- **Citation:** TCN-2020-NCLT-02131
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/kishori-lal-sudesh-kumar-metals-pvt-ltd-cp-no-ib-276-7-jpr-2019-a8e72cda

## Summary

### Background

The case involves an application filed by Shri Raghav Aggarwal, claiming to be a Financial Creditor, against M/s Kishori Lal Sudesh Kumar Metals Private Limited, the Corporate Debtor, under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of the Corporate Insolvency Resolution Process (CIRP). The applicant claimed default in repayment of the redemption amount of debentures issued by the respondent. The applicant is the son/legal heir of Late Shri Dharam Veer Aggarwal, who had purchased 4000 12% Non-Convertible Debentures of Rs. 100 each in December 1999, redeemable on 31.12.2017. The corporate debtor admitted to the issuance of debentures but stated they had incurred losses and shut down production, being unable to settle dues.

## Facts

Shri Raghav Aggarwal, claiming to be a Financial Creditor and the legal heir of Late Shri Dharam Veer Aggarwal, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 against M/s Kishori Lal Sudesh Kumar Metals Private Limited ('Corporate Debtor'). Shri Dharam Veer Aggarwal had purchased 4000 12% Non-Convertible Debentures of Rs. 100 each in December 1999, which were redeemable on 31.12.2017. After his demise, Shri Raghav Aggarwal became the legal heir to these debentures. The Corporate Debtor defaulted on the redemption amount of Rs. 36,94,987/-. The applicant sent numerous letters and a demand notice, but received no reply. The Corporate Debtor admitted to the issuance of debentures but claimed inability to pay due to losses and shutdown of

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## Issues and analysis

### Issue 1: Whether the application filed by Shri Raghav Aggarwal 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 Tribunal perused the application and documents, finding them complete and

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**Interpretation:** Section 7 provides a mechanism for financial creditors to recover debts from

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**Application:** The applicant, being the legal heir of the original debenture holder, was

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## Parties

- **Judges:** P.S.N. P…; RAGHU N…; +1 more
- **Appellants:** Raghav Ag…
- **Respondents:** M/S Kishori Lal…

## Timeline

- **1999-12-01 — Debenture P…**: Shri Dharam Veer Aggarwal purchased…
- **2017-12-31 — Debenture Redemption…**: Debentures were…

## 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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