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

> NCLT judgment dated 2021-03-23. Citation: TCN-2021-NCLT-02591. M/s. Algae Apparels, the financial creditor, filed C.P.(IB)No.204/BB/2020 under Section 7 of…

- **Court:** NCLT
- **Order date:** 23 Mar 2021
- **Citation:** TCN-2021-NCLT-02591
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/swe-fashions-private-limited-cpibno-204-bb-2020-b4cdca4a

## Summary

### Background

M/s. Algae Apparels, the financial creditor, filed C.P.(IB)No.204/BB/2020 under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against M/s. SWE Fashions Private Limited, the corporate debtor, due to a default of Rs. 2,48,95,572.83. The corporate debtor had taken a loan of Rs. 2,50,00,000 from the financial creditor, and a loan agreement was executed on 30.12.2018. The corporate debtor expressed inability to pay the installments due to financial difficulties. The respondent filed a reply stating that it is not able to successfully carry out business and is not in a position to honor its financial commitments. The respondent also stated that its assets are not sufficient to pay off its

…

## Facts

M/s. Algae Apparels (financial creditor) filed a petition under Section 7 of the IBC, 2016, to initiate CIRP against M/s. SWE Fashions Private Limited (corporate debtor). The corporate debtor defaulted on a loan of Rs. 2,48,95,572.83, which included principal and interest at 10% p.a. A loan agreement was executed on 30.12.2018. The corporate debtor admitted to the debt but claimed inability to repay due to financial difficulties and existing liabilities. The corporate debtor's assets as of 31.03.2019 were Rs. 23,18,85,269, while liabilities were Rs. 29,50,35,092, resulting in a deficit of Rs. 6,31,49,823. The corporate debtor passed a Board Resolution on 27.12.2018 for obtaining the loan. The financial creditor had also filed I.A. No 92 of 2021. The respondent filed a

…

## Issues and analysis

### Issue 1: Whether the Corporate Debtor committed a default for total amount of Rs.2,48,95,572.83/- which …

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

…

**Reasoning:** The Adjudicating Authority considered the loan agreement, the corporate debtor's

…

**Interpretation:** Section 7 of the IBC allows a financial creditor to initiate CIRP when a

…

**Application:** The corporate debtor admitted to the debt of Rs. 2,48,95,572.83 and failed to

…

## Parties

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

## Timeline

- **2018-12-30 — Loan Agreement…**: A Loan Agreement was executed between M/s. Algae Apparels and M/s. SWE Fashions Private…
- **2020-01-01 — Filing of CP(IB)No.204/B…**: M/s. Algae Apparels filed C.P.(IB)No.204/BB/2020 under Section 7 of IBC, 2016, seeking to…

## 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)

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclt-chandigarh/swe-fashions-private-limited-cpibno-204-bb-2020-b4cdca4a