# In the matter of Moving Picture Company (India) Limited (IB) 1368 (ND)-2018

> NCLT judgment dated 2019-06-11. Citation: TCN-2019-NCLT-02983. The case involves an application filed by Virgo Services Private Limited, the financial…

- **Court:** NCLT
- **Order date:** 11 Jun 2019
- **Citation:** TCN-2019-NCLT-02983
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/moving-picture-company-india-limited-ib-1368-nd-2018-11ee5eed

## Summary

### Background

The case involves an application filed by Virgo Services Private Limited, the financial creditor, under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against Moving Picture Company (India) Limited, the corporate debtor. The financial creditor and the corporate debtor had entered into a loan agreement on June 11, 2018, where the corporate debtor was given a facility to borrow up to Rs. 25,00,000. The financial creditor disbursed Rs. 20,00,000 in two tranches on June 13 and June 19, 2018. The corporate debtor made some interest payments but defaulted after September 1, 2018.

## Facts

Virgo Services Private Limited (financial creditor) filed an application under Section 7 of the IBC, 2016, to initiate CIRP against Moving Picture Company (India) Limited (corporate debtor). A loan agreement was executed on June 11, 2018, providing the corporate debtor with a borrowing facility of up to Rs. 25,00,000. The financial creditor disbursed Rs. 20,00,000 in two tranches on June 13 and 19, 2018. The corporate debtor paid interest of Rs. 61,755 until August 31, 2018, but defaulted on interest payments from September 1, 2018. The financial creditor issued letters on September 15 and 22, 2018, demanding repayment. The corporate debtor claimed the financial creditor reneged on a promise to disburse further funds. The corporate debtor's registered office is located

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## Issues and analysis

### Issue 1: Whether the application filed by the financial creditor under Section 7 of the IBC, 2016 is …

**Ratio:** Section 7(5)(a) of the IBC states that the Adjudicating Authority (NCLT) may admit the

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**Reasoning:** The court found that the application was complete and there was no disciplinary

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**Interpretation:** The completeness of the application is a prerequisite for its admission under

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**Application:** The court determined that the application filed by Virgo Services Private

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## Parties

- **Judges:** Ina Mal…; DeepaKr…
- **Appellants:** Virgo Services…
- **Respondents:** Moving Picture…
- **Advocates:** KD Sh…; Sweta…; +1 more

## Timeline

- **1989-06-01 — Incorporation of…**: Moving Picture Company…
- **2018-06-11 — Loan Agre…**: Financial creditor and corporate…

## 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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