# In the matter of Rathi Graphic Technologies Limited Company Petition (IB)No. 325-ALD-2019

> NCLT judgment dated 2020-02-03. Citation: TCN-2020-NCLT-02100. The case involves a petition filed by Exim Scrips Dealers Pvt. Ltd., the financial creditor,…

- **Court:** NCLT
- **Order date:** 3 Feb 2020
- **Citation:** TCN-2020-NCLT-02100
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/rathi-graphic-technologies-limited-company-petition-ibno-325-ald-2019-a515adf1

## Summary

### Background

The case involves a petition filed by Exim Scrips Dealers Pvt. Ltd., the financial creditor, under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of the Corporate Insolvency Resolution Process (CIRP) against Rathi Graphics Technologies Ltd., the corporate debtor, due to its inability to liquidate its financial debt. The corporate debtor had taken a loan of Rs. 95,00,000 from the financial creditor on 17.07.2012, which was repayable on demand with interest. The corporate debtor defaulted on payments after 31.03.2018.

## Facts

Exim Scrips Dealers Pvt. Ltd. (financial creditor) filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Rathi Graphics Technologies Ltd. (corporate debtor). A loan facility agreement was entered into on 17.07.2012, where Rs. 95,00,000 was disbursed by the financial creditor to the corporate debtor. The loan was repayable on demand with 9% interest per annum, payable monthly, and an additional 2% interest on inter-corporate deposits. The corporate debtor made payments until 31.03.2018 but defaulted thereafter. The financial creditor issued notices on 10.04.2018 and 30.04.2018. The corporate debtor admitted its liability in a letter dated 15.05.2018 and requested time to make the payment. No payment was received until 10.02.2019. The date

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## Issues and analysis

### Issue 1: Whether there is a duly …

**Ratio:** Section 7(1) of the Insolvency and Bankruptcy Code, 2016 requires the financial creditor

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**Reasoning:** The court examined the loan agreement and related documents to determine if a financial

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**Interpretation:** The existence of a financial debt is a prerequisite for initiating CIRP under

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**Application:** The court found that the loan agreement dated 17.07.2012 established a

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## Parties

- **Judges:** Rajesh Daya…
- **Appellants:** EXIM SCRIPS…
- **Respondents:** Rathi Graphic…

## Timeline

- **2012-07-17 — Loan Agre…**: Loan facility agreement entered into, Rs. 95,00,000 disbursed by the applicant to the…
- **2018-03-31 — Default in…**: Corporate debtor defaulted in making…

## 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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