# In the matter of Moli Merchant Traders Private Limited CP (IB)1255-MB-C-IV-2020

> NCLT judgment dated 2021-09-23. Citation: TCN-2021-NCLT-01033. Agrasen Trade Merchant Private Limited, the Financial Creditor, filed a Company Petition under…

- **Court:** NCLT
- **Order date:** 23 Sept 2021
- **Citation:** TCN-2021-NCLT-01033
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/moli-merchant-traders-private-limited-cp-ib1255-mb-c-iv-2020-9f25d7e0

## Summary

### Background

Agrasen Trade Merchant Private Limited, the Financial Creditor, filed a Company Petition under Section 7 of the Insolvency & Bankruptcy Code, 2016 (IBC) to initiate Corporate Insolvency Resolution Process (CIRP) against Moli Merchant Traders Private Limited, the Corporate Debtor, for a debt and default of Rs. 10,771,580 as of March 20, 2020. The Financial Creditor claimed that the Corporate Debtor had failed to repay the loan amount despite acknowledging the debt and issuing a demand promissory note.

## Facts

Agrasen Trade Merchant Private Limited (Financial Creditor) filed a petition against Moli Merchant Traders Private Limited (Corporate Debtor) under Section 7 of the IBC, seeking to initiate CIRP. The Financial Creditor claimed a debt and default of Rs. 10,771,580 as of March 20, 2020. The Financial Creditor and Corporate Debtor entered into an Inter-Corporate Loan Agreement dated November 19, 2018, for a loan amount of Rs. 2,61,50,000. The loan was disbursed in installments between November 2018 and January 2020. The loan was unsecured, with an interest rate of 15% per annum. The Corporate Debtor issued a letter on February 29, 2020, acknowledging a debt of Rs. 1,01,19,120. The Corporate Debtor also issued a demand promissory note on the same date for the same amount,

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor committed a default in repayment of the debt owed to the Financial …

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

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**Reasoning:** The Corporate Debtor acknowledged the debt and issued a demand promissory note. Despite

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**Interpretation:** The term 'default' under Section 3(12) of the IBC is interpreted as non-payment

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**Application:** The Corporate Debtor's failure to repay the loan amount, despite acknowledging

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## Parties

- **Judges:** RAJESH S…; SUCHITRAKAN…
- **Appellants:** Agrasen Trade…
- **Respondents:** Moli Merchant…

## Timeline

- **2018-11-19 — Inter-Corporate Loan…**: Parties executed an Inter-Corporate…
- **2018-11-28 — Loan Disbur…**: Loan disbursed to the…

## 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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