# In the matter of Sneh Sadan Traders and Agents Limited CP (IB) - 2641-I&B-MB-2019

> NCLT judgment dated 2019-10-22. Citation: TCN-2019-NCLT-00866. Rattan India Finance Pvt. Ltd. filed an application under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 22 Oct 2019
- **Citation:** TCN-2019-NCLT-00866
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/sneh-sadan-traders-and-agents-limited-cp-ib-2641-ib-mb-2019-af989da6

## Summary

### Background

Rattan India Finance Pvt. Ltd. filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking the Corporate Insolvency Resolution Process (CIRP) of Sneh Sadan Traders & Agents Limited, the Corporate Debtor. The application was based on the Corporate Debtor's default in repaying a loan facility of Rs. 100 Crores. The loan was secured by a pledge of equity shares of Cox & Kings Ltd. and Exeego One Tours and Travel Ltd. The petitioner contended that the market price of the pledged shares fell below the stipulated asset cover ratio, triggering an event of default. Despite notices and opportunities, the Corporate Debtor failed to rectify the default.

## Facts

Rattan India Finance Pvt. Ltd. (Petitioner) extended a loan facility of Rs. 100 Crores to Sneh Sadan Traders & Agents Limited (Corporate Debtor) under a Loan Facility Agreement dated 28/02/2018. The loan was secured by a pledge of equity shares of Cox & Kings Ltd. and Exeego One Tours and Travel Ltd. The Corporate Debtor defaulted on the loan repayment. The market price of the pledged shares fell below the stipulated asset cover ratio in February 2019, triggering a default event. The Petitioner issued default notices on 26/03/2019, recalling the loan. The Corporate Debtor admitted the fall in value of the pledged shares and requested a revised repayment schedule. The Petitioner suggested a revised schedule, but the Corporate Debtor failed to comply with its

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## Issues and analysis

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

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

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**Reasoning:** The court perused the documents, including the Loan Facility Agreement, default notices,

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**Interpretation:** The existence of a debt and default are essential prerequisites for admitting a

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**Application:** The Corporate Debtor's failure to repay the loan, despite the occurrence of a

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## Parties

- **Judges:** Bhaskara Pantula…; Shyam Babu…
- **Appellants:** Rattan India…
- **Respondents:** Sneh Sadan…; Sneh Sadan…

## Timeline

- **2018-02-28 — Loan Facility…**: Loan Facility Agreement executed between Rattan India Finance Pvt. Ltd. and Sneh Sadan…
- **2019-02-01 — Fall in Shar…**: Around February 2019, the market price of shares of Cox & Kings fell steeply, triggering…

## 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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