# In the matter of Snowqueen Towers Private Limited CP (IB) No. 697-KB-2018

> NCLT judgment dated 2018-10-26. Citation: TCN-2018-NCLT-00467. Reliance Commercial Finance Limited, a financial creditor, filed an application under Section 7…

- **Court:** NCLT
- **Order date:** 26 Oct 2018
- **Citation:** TCN-2018-NCLT-00467
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/snowqueen-towers-private-limited-cp-ib-no-697-kb-2018-8dbaa4ff

## Summary

### Background

Reliance Commercial Finance Limited, a financial creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Snowqueen Towers Private Limited, the corporate debtor, for initiating the Corporate Insolvency Resolution Process (CIRP). The corporate debtor had availed a loan of Rs. 3,51,00,000 from Reliance Capital Limited, the predecessor in interest of the applicant, and defaulted in repaying the amount. The outstanding amount in default was Rs. 3,45,60,304. The loan was secured by a mortgage on the corporate debtor's property. Despite repeated requests and notices, the corporate debtor failed to repay the amount due.

## Facts

Reliance Commercial Finance Limited (Applicant), a financial creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Snowqueen Towers Private Limited (Corporate Debtor) for initiating Corporate Insolvency Resolution Process (CIRP). The Corporate Debtor availed a loan of Rs. 3,51,00,000 from Reliance Capital Limited (predecessor in interest of the Applicant) vide loan agreement dated 28th November 2014. The loan was to be repaid in 175 monthly installments. The Corporate Debtor defaulted in repaying the loan, with an outstanding amount of Rs. 3,45,60,304. The Corporate Debtor mortgaged its property as security for the loan. Despite repeated requests and a loan recall notice dated 27.01.2018, the Corporate Debtor failed to

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## Issues and analysis

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

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

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**Reasoning:** The court found that the Corporate Debtor had defaulted in repaying the loan amount as

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**Interpretation:** Section 7 of the IBC provides a mechanism for financial creditors to recover

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**Application:** The court applied Section 7 of the IBC to the facts of the case, finding that

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## Parties

- **Judges:** Jinan…
- **Appellants:** Reliance Commercia…
- **Respondents:** Snowqueen Towers…

## Timeline

- **2014-11-28 — Loan Agreement…**: Reliance Capital Limited extended a loan of Rs. 3,51,00,000 to Snowqueen Towers Private…
- **2018-01-27 — Loan Recall…**: Reliance Commercial Finance Limited issued a loan recall notice to Snowqueen Towers…

## 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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