# In the matter of Showlin Network Marketing Pvt. Ltd. CP(IB) 2305(MB)-2018

> NCLT judgment dated 2019-07-15. Citation: TCN-2019-NCLT-02538. Macro Leafin Private Limited, the Financial Creditor, filed a petition under Section 7 of the…

- **Court:** NCLT
- **Order date:** 15 Jul 2019
- **Citation:** TCN-2019-NCLT-02538
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/showlin-network-marketing-pvt-ltd-cpib-2305mb-2018-2fedc16b

## Summary

### Background

Macro Leafin Private Limited, the Financial Creditor, filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) to initiate the Corporate Insolvency Resolution Process (CIRP) against Showlin Network Marketing Pvt Ltd, the Corporate Debtor. The basis for the petition was the Corporate Debtor's default in payment of ₹5,00,000/-. The default date was 1.7.2015. A loan agreement dated 15.3.2013 was executed between the parties for a loan facility of Rs.7,00,000, with a repayment deadline of 30.6.2015.

## Facts

Macro Leafin Private Limited (Financial Creditor) lent Rs.7,00,000 to Showlin Network Marketing Pvt Ltd (Corporate Debtor) under a Loan Agreement dated 15.3.2013, with a repayment deadline of 30.6.2015. The Corporate Debtor defaulted on the repayment. The Financial Creditor recalled the loan via letter dated 10.7.2015. The Corporate Debtor repaid Rs.2,00,000 on 27.3.2017, leaving Rs.5,00,000 unpaid. The Financial Creditor filed a petition under Section 7 of the IBC, 2016, to initiate CIRP. The Corporate Debtor failed to appear at hearings and did not file a reply. The Financial Creditor also filed Form 2, i.e. the written communication by the proposed Interim Resolution professional, Mr Paresh Chandulal Mehta.

## Issues and analysis

### Issue 1: Whether the petition filed by the Financial Creditor under Section 7 of the Insolvency and …

**Ratio:** The ratio is based on Section 7 of the IBC, 2016, which allows a financial creditor to

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**Reasoning:** The court reasoned that the Corporate Debtor defaulted on the loan repayment, and the

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**Interpretation:** Section 7 of the IBC is interpreted to mean that if a financial debt exists, a

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**Application:** The court applied the ratio and reasoning to the facts, noting that the

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## Parties

- **Judges:** Mr V.P.…; Mr Ravikumar…; +1 more
- **Appellants:** Macro Leafin…
- **Respondents:** Showlin Network…

## Timeline

- **2013-03-15 — Loan Agreeme…**: Loan Agreement executed between Macro Leafin Private Limited and Showlin Network…
- **2015-06-30 — Repayment D…**: The date by which Showlin Network Marketing Pvt Ltd was supposed to repay the loan…

## 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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