# In the matter of Tag Info Solutions India Private Limited CP-1487-IB-2018

> NCLT judgment dated 2019-08-05. Citation: TCN-2019-NCLT-02112. The case involves a Company Petition filed by a Financial Creditor, Dr. T. Palaniappan, under…

- **Court:** NCLT
- **Order date:** 5 Aug 2019
- **Citation:** TCN-2019-NCLT-02112
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/tag-info-solutions-india-private-limited-cp-1487-ib-2018-15cf319e

## Summary

### Background

The case involves a Company Petition filed by a Financial Creditor, Dr. T. Palaniappan, under Section 7 of the Insolvency and Bankruptcy Code (IBC) for initiating the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, M/s. Tag Info Solutions India Private Limited. The Corporate Debtor defaulted in repaying ₹20,00,000 plus interest of ₹1,60,000 as on 22.11.2018. The Financial Creditor advanced ₹20,00,000 to the Corporate Debtor on various dates in April 2018, and the Corporate Debtor executed a Promissory Note dated 20.04.2018 promising to repay the borrowed amount with 12% interest. A cheque issued by the Corporate Debtor was dishonored due to 'Funds Insufficient'.

## Facts

Dr. T. Palaniappan, the Financial Creditor, filed a Company Petition under Section 7 of the IBC to initiate CIRP against M/s. Tag Info Solutions India Private Limited, the Corporate Debtor. The Corporate Debtor defaulted on repaying ₹20,00,000 plus interest of ₹1,60,000 as of 22.11.2018. The Financial Creditor had advanced ₹20,00,000 to the Corporate Debtor in April 2018 through RTGS transfers on various dates: ₹2,00,000 on 16.04.2018, ₹3,00,000 on 16.04.2018, and ₹15,00,000 on 20.04.2018. In consideration, the Corporate Debtor executed a Promissory Note dated 20.04.2018, promising to repay the borrowed amount with 12% interest. A cheque (number 248612) of ICCI Bank Ltd dated 20.11.2018, issued by the Corporate Debtor, was dishonored due to 'Funds Insufficient'. The

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor defaulted in repaying the debt owed to the Financial Creditor, thus …

**Ratio:** Section 7 of the IBC allows a financial creditor to initiate CIRP against a corporate

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**Reasoning:** The court found that the Corporate Debtor admitted the debt but failed to clear the

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**Interpretation:** Section 7 of the IBC is interpreted to mean that if a corporate debtor defaults

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**Application:** The Corporate Debtor's failure to repay the debt, coupled with the dishonored

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## Parties

- **Judges:** B.S.V. Prakash…; Anil Ku…
- **Appellants:** T. Palani…
- **Respondents:** M/s. Tag Info…

## Timeline

- **2018-04-01 — Financial Creditor…**: The Financial Creditor advanced ₹20,00,000 to the Corporate Debtor on various dates in…
- **2018-04-20 — Promissory Note…**: The Corporate Debtor executed a Promissory Note promising to repay the borrowed amount…

## 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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