# In the matter of Liners India Ltd. CP (IB) No. 498-7-HDB-2018

> NCLT judgment dated 2018-10-30. Citation: TCN-2018-NCLT-00435. The case involves a Company Petition filed by Urvasi Theatres Private Limited (Financial…

- **Court:** NCLT
- **Order date:** 30 Oct 2018
- **Citation:** TCN-2018-NCLT-00435
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/liners-india-ltd-cp-ib-no-498-7-hdb-2018-94a74995

## Summary

### Background

The case involves a Company Petition filed by Urvasi Theatres Private Limited (Financial Creditor) against Liners India Limited (Corporate Debtor) under Section 7 of the Insolvency and Bankruptcy Code, 2016. The petition pertains to the non-payment of dues amounting to Rs. 60,00,000/- arising from an Inter-Corporate Deposit (ICD) agreement. The Financial Creditor deposited the amount with the Corporate Debtor based on a request and assurance of repayment by March 31, 2018. Despite multiple letters and requests, the Corporate Debtor failed to repay the amount.

## Facts

Urvasi Theatres Private Limited (Financial Creditor) filed a Company Petition against Liners India Limited (Corporate Debtor) under Section 7 of the Insolvency and Bankruptcy Code, 2016, due to non-payment of dues. The Financial Creditor and Corporate Debtor entered into an Inter-Corporate Deposit (ICD) agreement dated 30th October, 2017, where the Financial Creditor deposited Rs. 60,00,000/- with the Corporate Debtor. The Corporate Debtor requested the ICD and assured repayment by March 31, 2018. The Financial Creditor deposited the amount on 03.11.2017. The ICD carried an interest rate of 13% p.a. payable monthly. The Corporate Debtor failed to repay the amount by the agreed date. The Financial Creditor sent multiple letters demanding repayment. The Corporate Debtor

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor defaulted on the …

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

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**Reasoning:** The Corporate Debtor admitted its inability to make payments to the Financial Creditor

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**Interpretation:** The term 'default' under Section 3(12) of the IBC, 2016, means non-payment of

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**Application:** The Corporate Debtor's failure to repay the ICD amount by the agreed date

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## Parties

- **Judges:** K. Anantha…
- **Appellants:** Urvasi Theatres…
- **Respondents:** Liners Ind…

## Timeline

- **2017-10-30 — ICD Agre…**: Inter-Corporate Deposit Agreement entered between Urvasi Theatres Pvt Ltd and Liners…
- **2017-11-03 — Deposit of…**: Urvasi Theatres Pvt Ltd deposited Rs.…

## 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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