# In the matter of Monotype India Limited CP (IB) 3657-MB-C-II-2018

> NCLT judgment dated 2020-02-18. Citation: TCN-2020-NCLT-01912. The case pertains to a Company Petition filed under Section 7 of the Insolvency & Bankruptcy…

- **Court:** NCLT
- **Order date:** 18 Feb 2020
- **Citation:** TCN-2020-NCLT-01912
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/monotype-india-limited-cp-ib-3657-mb-c-ii-2018-96a0f0dc

## Summary

### Background

The case pertains to a Company Petition filed under Section 7 of the Insolvency & Bankruptcy Code, 2016 (IBC) by Yaduka Financial Services Limited ("the Financial Creditor") seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Monotype India Limited ("the Corporate Debtor"). The petition was filed due to the Corporate Debtor's failure to repay a loan of Rs. 10 Crore along with interest. The Corporate Debtor had approached the Financial Creditor for the loan, agreeing to pay interest at 15% per annum with an additional 2% penal interest. The loan was disbursed in March 2017, and the Corporate Debtor also executed a Demand Promissory Note and a letter of continuing guarantee. Despite this, the Corporate Debtor defaulted on

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## Facts

1. Yaduka Financial Services Limited (Financial Creditor) filed a petition under Section 7 of the Insolvency & Bankruptcy Code, 2016 (IBC) to initiate Corporate Insolvency Resolution Process (CIRP) against Monotype India Limited (Corporate Debtor).
2. The Corporate Debtor is a private company incorporated on 30.09.1974 under the Companies Act, 1956.
3. The petition was filed on 25.09.2018 due to the Corporate Debtor's failure to pay Rs. 12,17,43,290/-, with the date of default stated as 26.03.2018.
4. The Corporate Debtor requested a loan of Rs. 10 Crore from the Financial Creditor, with an interest rate of 15% per annum and a penal interest of 2% per annum.
5. The loan was disbursed on 22.03.2017, 23.03.2017, and 24.03.2017, and the Corporate Debtor acknowledged the

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor defaulted on its debt obligations to the Financial Creditor, …

**Ratio:** Section 7 of the IBC allows a financial creditor to initiate CIRP against a corporate

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**Reasoning:** The court reasoned that the Corporate Debtor failed to repay the loan amount of Rs. 10

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**Interpretation:** Section 7 of the IBC is interpreted to mean that if a financial debt exists,

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**Application:** In this case, the Financial Creditor provided sufficient evidence of the debt

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## Parties

- **Judges:** Rajasekha…; RavikumarDu…
- **Appellants:** Yaduka Financial…
- **Respondents:** Monotype India…

## Timeline

- **1974-09-30 — Incorporation of…**: Monotype India Limited incorporated…
- **2017-03-22 — Loan Disbur…**: Rs.10 Crore disbursed…

## 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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