# In the matter of Ram Lal Kamal Raj Jewellers Pvt. Ltd. IB-537- (ND)-2020

> NCLT judgment dated 2022-01-06. Citation: TCN-2022-NCLT-04526. The application was filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, to…

- **Court:** NCLT
- **Order date:** 6 Jan 2022
- **Citation:** TCN-2022-NCLT-04526
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/ram-lal-kamal-raj-jewellers-pvt-ltd-ib-537-nd-2020-ab002a53

## Summary

### Background

The application was filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s Ram Lal Kamal Raj Jewellers Pvt. Ltd. for defaulting on a payment of Rs. 24,28,202/- to the applicant, M/s Paisalo Digital Ltd. The applicant, incorporated under the Companies Act, 1996, had granted a loan of Rs. 15,00,000/- to the corporate debtor on 08.05.2014, with a 9% annual interest rate. The corporate debtor defaulted on repayment, leading to the application for CIRP.

## Facts

M/s Paisalo Digital Ltd. filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate CIRP against M/s Ram Lal Kamal Raj Jewellers Pvt. Ltd. The applicant, M/s Paisalo Digital Ltd., is a company incorporated under the Companies Act, 1996. The corporate debtor, M/s Ram Lal Kamal Raj Jewellers Pvt. Ltd., was granted a loan of Rs. 15,00,000/- by the applicant on 08.05.2014, with a 9% annual interest rate. The corporate debtor defaulted on the repayment of the principal amount and interest. The total liability of the corporate debtor, including the principal amount of Rs. 16,08,850/- and interest amounting to Rs. 7,99,352/-, totaled Rs. 24,08,202/- as of 30.11.2019. The corporate debtor was served notice but remained absent and

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## Issues and analysis

### Issue 1: Whether the application filed by M/s Paisalo Digital Ltd. under Section 7 of the Insolvency and …

**Ratio:** Section 7 of the Insolvency and Bankruptcy Code, 2016, allows a financial creditor to

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**Reasoning:** The Tribunal noted that the applicant had established the existence of debt and default

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**Interpretation:** Section 7 provides a mechanism for financial creditors to recover their dues

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**Application:** In this case, the applicant, M/s Paisalo Digital Ltd., demonstrated that M/s

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## Parties

- **Judges:** SHRI. P.S.N.…; SHRI. RAHUL…
- **Appellants:** M/s Paisalo…
- **Respondents:** M/s Ram Lal Kamal…

## Timeline

- **2014-05-08 — Loan Gra…**: M/s Paisalo Digital Ltd. granted a loan of Rs 15,00,000/- to M/s Ram Lal Kamal Raj…
- **2021-10-12 — Ex-parte…**: The Respondent was proceeded…

## 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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