# In the matter of Royalpet Vanijya Private Limited C.P (IB) No. 96-KB-2021

> NCLT judgment dated 2021-12-01. Citation: TCN-2021-NCLT-00318. Oval Distributors Pvt. Ltd. filed an application under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 1 Dec 2021
- **Citation:** TCN-2021-NCLT-00318
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/royalpet-vanijya-private-limited-cp-ib-no-96-kb-2021-1a145ae4

## Summary

### Background

Oval Distributors Pvt. Ltd. filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Royalpet Vanijya Private Limited, seeking initiation of the Corporate Insolvency Resolution Process (CIRP). The financial creditor, Oval Distributors, claimed that it had sanctioned and disbursed a loan to the corporate debtor, Royalpet Vanijya, which the latter failed to repay, leading to a default. The corporate debtor contested the application, arguing that it was not maintainable and filed with malicious intent.

## Facts

Oval Distributors Pvt. Ltd. (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Royalpet Vanijya Private Limited (Corporate Debtor). The Financial Creditor sanctioned a loan of Rs. 1,58,00,000 to the Corporate Debtor on December 26th and 29th, 2014, with an interest rate of 12% per annum. The Corporate Debtor approached the Financial Creditor for a business loan of Rs. 1,60,00,000 via a letter dated January 15th, 2014. The Financial Creditor disbursed Rs. 95,00,000 and Rs. 63,00,000 on December 26th and 29th, 2014, respectively. The Corporate Debtor started defaulting on repayments, leading the Financial Creditor to issue letters on March 5th, April 14th, and May 15th, 2019, demanding payment of Rs. 1,58,00,000

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor 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 court considered the documents and arguments presented by both parties. The Financial

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

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**Application:** The court found that the Financial Creditor had demonstrated the existence of a

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## Parties

- **Judges:** Rohit K…; Harish Chander…; +1 more
- **Appellants:** Oval Distributors…
- **Respondents:** Royalpet Vanijya…

## Timeline

- **2014-01-15 — Corporate Debtor…**: Royalpet Vanijya Private Limited (Corporate Debtor) approached Oval Distributors Pvt.…
- **2014-11-28 — Board Resolution for…**: Financial Creditor sanctioned credit facility/financial assistance of Rs. 1,60,00,000 in…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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