# In the matter of Mothers Pride Dairy India Pvt. Ltd. IB-2122(ND)2019

> NCLT judgment dated 2019-11-13. Citation: TCN-2019-NCLT-00614. The petition was filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, read with…

- **Court:** NCLT
- **Order date:** 13 Nov 2019
- **Citation:** TCN-2019-NCLT-00614
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/mothers-pride-dairy-india-pvt-ltd-ib-2122nd2019-154b7fd4

## Summary

### Background

The petition was filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, by Smt. Shalini Choudhary to initiate the Corporate Insolvency Resolution Process against M/s Mothers Pride Dairy India Pvt. Ltd. The Financial Creditor, Shalini Choudhary, claimed that the Corporate Debtor defaulted on a loan agreement dated 10.07.2017. The Corporate Debtor argued that there was no default as the repayment deadline was in 2021 and that the Financial Creditor concealed documents related to the termination of the Master Agreement and subsequent term sheets.

## Facts

Smt. Shalini Choudhary, the Financial Creditor, filed a petition under Section 7 of the IBC, 2016, against M/s Mothers Pride Dairy India Pvt. Ltd., the Corporate Debtor. The Corporate Debtor was incorporated on 30.09.2014. The Financial Creditor had infused INR 19,17,48,515 into the Corporate Debtor between 30.09.2014 and 05.04.2017, receiving 1,29,42,999 equity shares in return. The Financial Creditor ceased to be a director on 01.04.2017 and a shareholder on 10.07.2017. Upon her exit as a shareholder, it was agreed that INR 2,00,00,000 was due from the Corporate Debtor to the Financial Creditor, formalized in a loan agreement dated 10.07.2017. The Corporate Debtor was to repay the loan in four equal installments, but failed to make the first two payments, totaling

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor committed a 'default' as …

**Ratio:** Section 3(12) of the IBC, 2016 defines 'default' as non-payment of debt when whole or any

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**Reasoning:** The court referred to the definition of 'default' under Section 3(12) of the IBC, 2016,

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**Interpretation:** The definition of 'default' under Section 3(12) of the IBC, 2016, is

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**Application:** The Corporate Debtor was required to make payments of Rs.50 Lakhs each within

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## Parties

- **Judges:** Ina Mal…; L. N. G…
- **Appellants:** Shalini Cho…
- **Respondents:** M/s Mothers Pride…

## Timeline

- **2014-09-30 — Incorporation of…**: Mothers Pride Dairy India…
- **2014-09-30 — Financial Creditor…**: Financial Creditor infused funds into the Corporate Debtor between 30.09.2014 and…

## 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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