# In the matter of Techno Fab Manufacturing Limited CP (IB) No. 710-KB-2017

> NCLT judgment dated 2018-02-16. Citation: TCN-2018-NCLT-01813. Jaiprakash Overseas Finance Limited, the Financial Creditor, filed an application under Section…

- **Court:** NCLT
- **Order date:** 16 Feb 2018
- **Citation:** TCN-2018-NCLT-01813
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/techno-fab-manufacturing-limited-cp-ib-no-710-kb-2017-e10c48cb

## Summary

### Background

Jaiprakash Overseas Finance Limited, the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, Techno Fab Manufacturing Limited, due to a default in payment of Rs. 5,20,219/- as of 31.10.2017. The Corporate Debtor had taken a loan of Rs. 20 lakhs from the Financial Creditor for working capital, bearing interest at 12% p.a. The loan was disbursed via RTGS from Punjab National Bank on 06.07.2015. While the Corporate Debtor made some repayments, a default occurred, leading to the application for CIRP.

## Facts

Jaiprakash Overseas Finance Limited (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Techno Fab Manufacturing Limited (Corporate Debtor). The Corporate Debtor availed a loan of Rs. 20 lakhs from the Financial Creditor for working capital, with an interest rate of 12% p.a. The loan was disbursed on 06.07.2015 via RTGS from Punjab National Bank. The Corporate Debtor made some repayments, but defaulted on an amount of Rs. 5,20,219/- as of 31.10.2017. The Financial Creditor submitted a written communication dated 15th November 2017, in terms of Rule 9(1) of Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules, 2016. The Corporate

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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:** The ratio is based on the interpretation of Section 7 of the Insolvency and Bankruptcy

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**Reasoning:** The Adjudicating Authority reasoned that the Financial Creditor had provided sufficient

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**Interpretation:** Section 7 of the I&B Code allows a financial creditor to initiate CIRP

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**Application:** The ratio and reasoning were applied to the facts of the case, where the

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## Parties

- **Judges:** Jinan…
- **Appellants:** Jaiprakash…
- **Respondents:** Techno Fab…; Techno Fab…
- **Advocates:** Pranay Ag…; Arush Sen…

## Timeline

- **2015-07-06 — Loan Disbur…**: The Financial Creditor disbursed a loan of Rs. 20 lakhs to the Corporate Debtor via RTGS…
- **2017-10-31 — Default…**: The Corporate Debtor defaulted on a…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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