# In the matter of Spectrum Hi-Style Shoppers Private Limited  IBA-168-2020

> NCLT judgment dated 2021-02-23. Citation: TCN-2021-NCLT-02947. The case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 23 Feb 2021
- **Citation:** TCN-2021-NCLT-02947
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/spectrum-hi-style-shoppers-private-limited-iba-168-2020-57e21084

## Summary

### Background

The case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, by M. Rafi (Financial Creditor) against M/s. Spectrum Hi-Style Shoppers Private Limited (Corporate Debtor) for initiating Corporate Insolvency Resolution Process (CIRP). The applicant claimed to have given a loan of Rs. 1,71,00,000 to the corporate debtor, with the last disbursement on 23.07.2018. The applicant further stated that the amount due, including interest, was Rs. 1,96,93,316.74, and a cheque issued by the corporate debtor for Rs. 1,71,00,000 was dishonored.

## Facts

M. Rafi filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against M/s. Spectrum Hi-Style Shoppers Private Limited, seeking to initiate CIRP. Rafi claimed to have disbursed a loan of Rs. 1,71,00,000 to the Corporate Debtor, with the last disbursement on 23.07.2018. The total amount due, including interest, was stated to be Rs. 1,96,93,316.74. A cheque for Rs. 1,71,00,000 issued by the Corporate Debtor was dishonored. The applicant provided worksheet details of disbursement from 16.12.2017 to 23.07.2018, and claimed interest payments of Rs. 49,27,000. The applicant provided details of five different bank accounts from which the payments were allegedly made. However, the applicant's name was not reflected in any of these accounts, and the

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## Issues and analysis

### Issue 1: Whether the applicant has provided sufficient evidence to prove the existence of a financial debt …

**Ratio:** Section 7 of the Insolvency and Bankruptcy Code, 2016, requires the applicant to prove

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**Reasoning:** The Adjudicating Authority observed that the applicant failed to provide bank statements

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**Interpretation:** The Adjudicating Authority interpreted Section 7 of the IBC to require the

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**Application:** In this case, the applicant failed to provide sufficient evidence to prove the

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## Parties

- **Judges:** R. Sucha…; B. Anil…
- **Appellants:** M. R…
- **Respondents:** M/s. Spectrum…

## Timeline

- **2020-01-01 — IBA/168/202…**: Application IBA/168/2020…
- **2018-07-23 — Last Date of Loan…**: Last date of disbursement of loan by the…

## 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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