# In the matter of Shree Raj Mahal Jewellers Pvt. Ltd. C.P. No. IB-818(PB)-2018

> NCLT judgment dated 2019-04-24. Citation: TCN-2019-NCLT-03720. The case involves a petition filed by Reliance Commercial Finance Ltd., the financial creditor,…

- **Court:** NCLT
- **Order date:** 24 Apr 2019
- **Citation:** TCN-2019-NCLT-03720
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/shree-raj-mahal-jewellers-pvt-ltd-cp-no-ib-818pb-2018-6954ff0e

## Summary

### Background

The case involves a petition filed by Reliance Commercial Finance Ltd., the financial creditor, under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Shree Raj Mahal Jewellers Pvt. Ltd., the corporate debtor, seeking to initiate the Corporate Insolvency Resolution Process (CIRP). The financial creditor claimed default on loan facilities provided to the corporate debtor. The corporate debtor raised objections regarding a Scheme of Arrangement between Reliance Capital Ltd. and Reliance Commercial Finance Ltd., arguing they were not informed about it. The financial creditor argued that the corporate debtor was liable to make payments as per the agreed schedule.

## Facts

Reliance Commercial Finance Ltd. filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Shree Raj Mahal Jewellers Pvt. Ltd., seeking to initiate the Corporate Insolvency Resolution Process (CIRP). The financial creditor had sanctioned four loan facilities to the corporate debtor, evidenced by separate loan agreements dated 2016-09-30. The financial creditor issued four Loan Recall Notices dated 2018-03-27, demanding repayment of Rs. 14,76,48,238/-, Rs. 1,37,06,113/-, Rs. 3,15,89,835/-, and Rs. 8,97,58,258/-. The total amount in default as of 2018-06-13 was Rs. 28,94,80,609/-. The corporate debtor raised an objection regarding a Scheme of Arrangement between Reliance Capital Ltd. and Reliance Commercial Finance Ltd., sanctioned by the

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## Issues and analysis

### Issue 1: Whether the requirements of Section 7 of the Insolvency and Bankruptcy Code, 2016, for initiating …

**Ratio:** Section 7 of the IBC allows a financial creditor to initiate CIRP against a corporate

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**Reasoning:** The court found that the financial creditor had provided sufficient evidence of the

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**Interpretation:** Section 7 of the IBC is interpreted to provide a mechanism for financial

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**Application:** In this case, the financial creditor, Reliance Commercial Finance Ltd.,

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## Parties

- **Judges:** M. M. K…; S. K. MOH…
- **Appellants:** Reliance Commercia…
- **Respondents:** Shree Raj Mahal…

## Timeline

- **2016-09-30 — Loan Agre…**: Four separate loan agreements were executed between Reliance Commercial Finance Ltd. and…
- **2016-12-09 — Scheme of Arrangement…**: The Hon'ble Bombay High Court sanctioned the Scheme of Arrangement between Reliance…

## 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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