# In the matter of Prime Car Private Limited CP No. (IB) 87-7-NCLT-AHM-2017

> NCLT judgment dated 2017-09-04. Citation: TCN-2017-NCLT-00473. The case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 4 Sept 2017
- **Citation:** TCN-2017-NCLT-00473
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/prime-car-private-limited-cp-no-ib-87-7-nclt-ahm-2017-12fc8437

## Summary

### Background

The case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, by Reliance Commercial Finance Ltd against Prime Cars Private Limited, treating the latter as a 'Corporate Debtor'. Reliance Commercial Finance Ltd sought to initiate the Corporate Insolvency Resolution Process (CIRP) against Prime Cars Private Limited due to default in repayment of loans. The Commercial Finance Division of Reliance Capital Limited was demerged into Reliance Commercial Finance Ltd. Prime Cars Private Limited had availed a revolving loan facility from Reliance Capital Limited for inventory funding, and two loans were disbursed in August and September 2016. The respondent defaulted on repayment, leading to the issuance of a legal notice.

## Facts

Reliance Commercial Finance Ltd filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Prime Cars Private Limited. Prime Cars Private Limited is engaged in buying and selling motorcycles and parts. The Corporate Debtor availed a revolving loan facility from Reliance Capital Limited for inventory funding. Reliance Capital Limited disbursed two loans of Rs. 50,00,000 each on 2016-08-26 and 2016-09-07. The loans were repayable on 2016-10-10 and 2016-10-22, respectively. As of 2016-10-22, the amount repayable was Rs. 97,02,848, including interest. The Commercial Finance Division of Reliance Capital Limited was demerged into Reliance Commercial Finance Ltd. Prime Cars Private Limited defaulted on repayment. Reliance Capital Limited issued

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## Issues and analysis

### Issue 1: Whether the application filed by Reliance Commercial Finance Ltd under Section 7 of the Insolvency …

**Ratio:** Section 7(5)(a) of the Insolvency and Bankruptcy Code allows the Adjudicating Authority

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**Reasoning:** The Adjudicating Authority perused the application and its annexures and found them to be

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**Interpretation:** Section 7 of the IBC outlines the procedure for initiating the Corporate

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**Application:** The application was found to be complete with all necessary documents and

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## Parties

- **Judges:** BIKKI RAVEENDRA…
- **Appellants:** Reliance Commercia…
- **Respondents:** Prime Cars…; Prime Cars Pvt.…

## Timeline

- **2016-08-26 — Loan Disbur…**: Reliance Capital Limited disbursed a loan of…
- **2016-09-07 — Loan Disbur…**: Reliance Capital Limited disbursed another loan of Rs. 50,00,000 to Prime Cars Private…

## 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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