# In the matter of RRC International Freight Services Limited CP No. 380-IBC-NCLT-MB-MAH-2018

> NCLT judgment dated 2018-12-26. Citation: TCN-2018-NCLT-00014. Indiabulls Housing Finance Limited, as the Financial Creditor, filed an application under…

- **Court:** NCLT
- **Order date:** 26 Dec 2018
- **Citation:** TCN-2018-NCLT-00014
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/rrc-international-freight-services-limited-cp-no-380-ibc-nclt-mb-mah-2018-109fec9a

## Summary

### Background

Indiabulls Housing Finance Limited, as the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against RRC International Freight Services Limited, the Corporate Debtor, due to default in repayment of a loan facility. The loan was obtained by the Corporate Debtor to purchase eight commercial vehicles, with Loan cum Hypothecation Agreements executed on 15.07.2014. The Financial Creditor claimed a total outstanding debt of ₹1,76,79,194/- as of 27.02.2018, after the Corporate Debtor defaulted on payments and failed to adhere to the terms of the agreements. Arbitration proceedings were initiated, and a settlement was reached, but the Corporate Debtor breached the settlement terms.

## Facts

RRC International Freight Services Limited (Corporate Debtor) availed a loan facility from Indiabulls Housing Finance Limited (Financial Creditor) to purchase eight commercial vehicles. Loan cum Hypothecation Agreements were executed on 15.07.2014, and a total of ₹2,42,25,029/- was disbursed. The Corporate Debtor defaulted on payments, leading the Financial Creditor to recall the loan facility via a notice dated 06.01.2015, demanding ₹2,61,11,806/-. Arbitration proceedings were initiated, resulting in a settlement that the Corporate Debtor later breached. As of 27.02.2018, the outstanding debt was ₹1,76,79,194/-. The Financial Creditor dispatched a demand notice on 31.05.2016 for ₹42,47,192/-, which the Corporate Debtor did not respond to. The Corporate Debtor did not

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor defaulted in …

**Ratio:** The principle that consistent failure to adhere to agreed payment schedules constitutes a

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**Reasoning:** The Corporate Debtor repeatedly defaulted in making payments of installments as per the

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**Interpretation:** The interpretation of 'default' involves examining the payment history and

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**Application:** The Corporate Debtor's repeated failure to pay installments and the lack of any

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## Parties

- **Judges:** M.K. Sh…
- **Appellants:** Indiabulls…
- **Respondents:** RRC International…

## Timeline

- **2014-07-15 — Loan Disbur…**: Loan cum Hypothecation Agreements were executed and the loan was disbursed to the…
- **2015-01-06 — Recall N…**: Financial Creditor issued a common recall notice for all 8 Loan Cum Hypothecation…

## 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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