# In the matter of Sapphire Space Infracon Private Limited CP (IB) No. 4186-(MB)-2018

> NCLT judgment dated 2021-04-06. Citation: TCN-2021-NCLT-02454. The case involves a petition filed under Section 7 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 6 Apr 2021
- **Citation:** TCN-2021-NCLT-02454
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/sapphire-space-infracon-private-limited-cp-ib-no-4186-mb-2018-3ac73112

## Summary

### Background

The case involves a petition filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking the initiation of the Corporate Insolvency Resolution Process (CIRP). Ganges Ink and Resins Private Limited, the petitioner, claimed that Sapphire Space Infracon Private Limited, the respondent, defaulted in payment of a financial debt. The petitioner provided Form-1, a pro-note dated 29.10.2013, and a ledger account showing a partial payment by the respondent. The petitioner sent a letter on 07.05.2016 demanding the outstanding loan amount. The respondent admitted the liability but cited unforeseen events preventing repayment.

## Facts

Ganges Ink and Resins Private Limited (the Petitioner) filed a petition against Sapphire Space Infracon Private Limited (the Respondent) under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) due to a default in payment of a financial debt. The Respondent had borrowed ₹ 15,00,000/- from the Petitioner, repayable with interest at 9% per annum, as evidenced by a pro-note dated 29.10.2013. The Respondent made a partial payment of ₹ 1,35,000/- on 15.07.2015. The Petitioner sent a letter on 07.05.2016 demanding the outstanding amount of ₹ 17,56,500/-, and the Respondent replied on 28.06.2016, stating the amount would be repaid within 6 months. The Respondent admitted the liability in its reply to the

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## Issues and analysis

### Issue 1: Whether the Company Petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, should be …

**Ratio:** Section 7 of the Insolvency and Bankruptcy Code, 2016, allows for the initiation of CIRP

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**Reasoning:** The court reasoned that the Respondent had unequivocally accepted the debt and default.

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**Interpretation:** Section 7 is interpreted to mean that if a debt exists and a default has

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**Application:** The Respondent's admission of liability and the documents filed by the

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## Parties

- **Judges:** Janab Mohammed…; V. Nallasen…
- **Appellants:** Ganges Ink and…
- **Respondents:** Sapphire Space…

## Timeline

- **2013-10-29 — Pro-note…**: Date of the pro-note indicating the loan agreement between the Petitioner and the…
- **2015-07-15 — Partial P…**: The Respondent made a partial payment…

## 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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