# In the matter of Rajhans Industries Private Limited CP No. IB-235-7-JPR-2019

> NCLT judgment dated 2021-08-05. Citation: TCN-2021-NCLT-01447. The petition was filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, read with…

- **Court:** NCLT
- **Order date:** 5 Aug 2021
- **Citation:** TCN-2021-NCLT-01447
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/rajhans-industries-private-limited-cp-no-ib-235-7-jpr-2019-1a174956

## 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 Nand Kishore Parihar, the Financial Creditor, to initiate the Corporate Insolvency Resolution Process (CIRP) against Rajhans Industries Private Limited, the Corporate Debtor. The Financial Creditor, while working as a Director in the Corporate Debtor company, had lent an unsecured loan to the company in his individual capacity. Later, in 2018, the Financial Creditor was removed from the post of directorship. The Financial Creditor raised a demand for the release of the full unsecured loan, but the Corporate Debtor stated its inability to settle the amount due to the non-operation of

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## Facts

Nand Kishore Parihar, the petitioner, is a financial creditor who filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Rajhans Industries Private Limited, the corporate debtor. The petitioner, while serving as a director in the respondent company, extended an unsecured loan to the company in his individual capacity. Subsequently, in 2018, the petitioner was removed from the directorship. The petitioner issued a notice dated 24.12.2018 demanding the release of the unsecured loan, but the corporate debtor replied on 25.01.2019 stating its inability to settle the amount due to the non-operation of its bank account. The outstanding amount as of 27.07.2019 was ₹29,50,000/-. The

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## Issues and analysis

### Issue 1: Whether the petition filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 is complete …

**Ratio:** Section 7(5) of the IBC states that if the Adjudicating Authority is satisfied that a

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**Reasoning:** The court found that the petition was complete and that the corporate debtor had

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**Interpretation:** Section 7 of the IBC provides the procedure for initiating CIRP by a financial

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**Application:** The court applied Section 7(5) of the IBC to the facts of the case, finding

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## Parties

- **Judges:** Ajay Kumar…; RaghuNa…
- **Appellants:** Nand Kishore…
- **Respondents:** Rajhans Industries…

## Timeline

- **1960-12-02 — Company Incor…**: Rajhans Industries Private Limited was…
- **2018-01-01 — Removal from Directorshi…**: Nand Kishore Parihar was removed from the post of directorship in Rajhans Industries…

## 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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