# In the matter of Shakti Nutraceuticals Pvt. Ltd. CP (IB) No. 78-7-NCLT-AHM-2017

> NCLT judgment dated 2017-08-28. Citation: TCN-2017-NCLT-00515. The Kalol Nagrik Sahakari Bank Limited filed an application under Section 7 of the Insolvency…

- **Court:** NCLT
- **Order date:** 28 Aug 2017
- **Citation:** TCN-2017-NCLT-00515
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/shakti-nutraceuticals-pvt-ltd-cp-ib-no-78-7-nclt-ahm-2017-e882834f

## Summary

### Background

The Kalol Nagrik Sahakari Bank Limited filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s. Shakti Nutraceuticals Pvt. Ltd. The bank claimed that M/s. Shakti Nutraceuticals Pvt. Ltd. had defaulted on a loan of Rs. 1,05,00,000 granted on 18.03.2015. The application was filed due to the alleged default in repayment of the loan amount.

## Facts

The Kalol Nagrik Sahakari Bank Limited extended a loan of Rs. 1,05,00,000 to M/s. Shakti Nutraceuticals Pvt. Ltd. on March 18, 2015. In support of this loan, the company and its two directors executed a Demand Promissory Note on the same date. Dhiren Kaniyalal Thakkar and Vinodchandra K. Pandya, directors of the respondent company, along with Gunvant Kantibhai Patel and Gitaben Gunvantbhai Patel, acted as guarantors for the loan. The guarantors also mortgaged their immovable property. The company agreed to pay interest at 13% per month and monthly installments of Rs. 87,500 commencing April 18, 2015. The agreement stipulated a penal interest of 3% for non-payment of installments. The bank issued demand notices on July 2, 2016, May 23, 2017, and June 20, 2017, but the

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## Issues and analysis

### Issue 1: Whether the application filed by the Kalol Nagrik Sahakari Bank Limited under Section 7 of the …

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

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**Reasoning:** The Adjudicating Authority considered the documents submitted by the applicant, including

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**Interpretation:** Section 7 provides the mechanism for a financial creditor to trigger the CIRP

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**Application:** The Adjudicating Authority applied Section 7 to the facts of the case, finding

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## Parties

- **Judges:** BIKKI RAVEENDRA…
- **Appellants:** The Kalol Nagrik…
- **Respondents:** M/s Shakti…

## Timeline

- **2015-03-18 — Loan Disb…**: The Kalol Nagrik Sahakari Bank Limited gave a loan of Rs. 1,05,00,000 to M/s. Shakti…
- **2015-03-18 — Demand Promiss…**: The Company and its two Directors…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5 — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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