# In the matter of Power Pack Steel Industries Private Limited TP No. 103-CTB-2019 in CP (IB) No. 624-MB-2019

> NCLT judgment dated 2019-09-27. Citation: TCN-2019-NCLT-01187. The case involves an application filed by Anand Kumar Agarwala, the Financial Creditor, under…

- **Court:** NCLT
- **Order date:** 27 Sept 2019
- **Citation:** TCN-2019-NCLT-01187
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/power-pack-steel-industries-private-limited-tp-no-103-ctb-2019-in-cp-ib-no-624-m-ed524cbb

## Summary

### Background

The case involves an application filed by Anand Kumar Agarwala, the Financial Creditor, under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s Power Pack Steel Industries Private Limited, the Corporate Debtor. The Financial Creditor claims that the Corporate Debtor defaulted in repaying a financial debt of Rs. 45,00,000. The application was initially filed before NCLT, Mumbai, and later transferred to the Cuttack Bench. The Corporate Debtor contested the application, alleging that the Financial Creditor is not a licensed money lender and that the loan was mistakenly described as an 'accommodation loan'.

## Facts

Anand Kumar Agarwala, the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s Power Pack Steel Industries Private Limited, the Corporate Debtor. The Financial Creditor disbursed a short-term loan of Rs. 10,00,000 on February 8, 2016, and a further loan of Rs. 35,00,000 on June 29, 2017, to the Corporate Debtor. These loans were disbursed via RTGS transfers to the Corporate Debtor's Federal Bank account. The Corporate Debtor allegedly defaulted in repaying the financial debt of Rs. 45,00,000. The Corporate Debtor made some interest payments until June 28, 2017. The Corporate Debtor also made bank transfers of Rs. 1,53,123 and Rs. 30,624 on October 22,

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016, for initiating …

**Ratio:** The Adjudicating Authority must be satisfied that a default has occurred and that the

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**Reasoning:** The court considered the evidence presented by the Financial Creditor, including bank

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

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**Application:** In this case, the court found that the Financial Creditor had provided

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## Parties

- **Judges:** Sucharit…; Satya Ranjan…
- **Appellants:** Anand Kumar…
- **Respondents:** M/s Power Pack…

## Timeline

- **2016-02-08 — Loan Disbur…**: Financial Creditor disbursed Rs.…
- **2017-06-29 — Further Loan Disbursemen…**: Financial Creditor disbursed 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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