# In the matter of SWE Fashions Private Limited C.P. (IB)No. 204-BB-2020

> NCLT judgment dated 2021-01-18. Citation: TCN-2021-NCLT-03284. M/s. Algae Apparels ('Financial Creditor') filed C.P.(IB)No.204/BB/2020 under Section 7 of the…

- **Court:** NCLT
- **Order date:** 18 Jan 2021
- **Citation:** TCN-2021-NCLT-03284
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/swe-fashions-private-limited-cp-ibno-204-bb-2020-0060765c

## Summary

### Background

M/s. Algae Apparels ('Financial Creditor') filed C.P.(IB)No.204/BB/2020 under Section 7 of the IBC, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against M/s. SWE Fashions Private Limited ('Corporate Debtor'). The Financial Creditor claimed that the Corporate Debtor had defaulted on a total amount of Rs. 2,48,95,572.83/-. The Financial Creditor stated that they had given a loan of Rs. 2,50,00,000/- to the Corporate Debtor, and a Loan Agreement was executed on December 30, 2018. The Corporate Debtor expressed inability to pay the installments due to financial difficulties.

## Facts

M/s. Algae Apparels, the Financial Creditor, filed a petition under Section 7 of the IBC, 2016, against M/s. SWE Fashions Private Limited, the Corporate Debtor, for defaulting on a total amount of Rs. 2,48,95,572.83/-. The Financial Creditor and the Corporate Debtor entered into a Loan Agreement on December 30, 2018, where the Financial Creditor provided a loan of Rs. 2,50,00,000/- to the Corporate Debtor. The Corporate Debtor admitted to the debt and default and expressed willingness to settle the claim. The Corporate Debtor passed a Board Resolution on December 27, 2018, for obtaining the loan. The Corporate Debtor could not repay the loan amount as agreed in the Loan Agreement due to financial constraints. The debt is outstanding in the books of the Corporate Debtor

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor committed a default …

**Ratio:** The admission of debt and default by the Corporate Debtor is a crucial factor in

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**Reasoning:** The Corporate Debtor admitted to the debt and default in question and expressed its

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**Interpretation:** The admission of debt and default by the Corporate Debtor is a significant

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**Application:** The Corporate Debtor admitted to the debt and default of Rs. 2,48,95,572.83/-.

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## Parties

- **Judges:** Rajeswara Rao…; Ashutosh C…
- **Appellants:** M/s. Algae…
- **Respondents:** M/s. SWE Fashions…
- **Advocates:** K. Dushyantha…; Chethan…

## Timeline

- **2018-12-27 — Board Reso…**: The Corporate Debtor passed a Board Resolution for the purpose of obtaining a loan from…
- **2018-12-30 — Loan Agre…**: A Loan Agreement was executed between 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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