# In the matter of Tirumala Projects Private Limited C.P. (IB) No. 225-KB-2019

> NCLT judgment dated 2019-11-01. Citation: TCN-2019-NCLT-00757. The case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 1 Nov 2019
- **Citation:** TCN-2019-NCLT-00757
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/tirumala-projects-private-limited-cp-ib-no-225-kb-2019-7189d77d

## Summary

### Background

The case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, by Kunal Finance and Credit Private Limited & Aris Capital Private Limited (Financial Creditors) against M/s. Tirumala Projects Private Limited (Corporate Debtor) for initiating Corporate Insolvency Resolution Process (CIRP). The Financial Creditors claimed that the Corporate Debtor defaulted in repaying unsecured loans amounting to Rs. 18,00,000/- and Rs. 17,00,000/- with interest at 17% p.a. till 01.08.2017. The Corporate Debtor opposed the application, contending that the Financial Creditors were not authorized to lend money, the claim was barred by limitation, and there were disputes that could be resolved amicably.

## Facts

Kunal Finance and Credit Private Limited and Aris Capital Private Limited (Financial Creditors) jointly filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Tirumala Projects Private Limited (Corporate Debtor) to initiate Corporate Insolvency Resolution Process (CIRP). The Financial Creditors claimed that they had sanctioned and disbursed unsecured loans in the form of Inter Corporate Deposits to the Corporate Debtor, amounting to Rs. 18.00 Lacs and Rs. 17.00 Lacs respectively, on 27.12.2013. These loans were disbursed via transfer/RTGS to the Corporate Debtor's bank accounts. The Inter Corporate Deposits were initially granted for 120 days and were renewed with interest at 17% p.a. from 27.12.2013. The interest rate was later

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## Issues and analysis

### Issue 1: Whether the Financial Creditors had the authority and necessary licenses to lend money to the …

**Ratio:** The court considered the argument that the Financial Creditors were allegedly Non-Banking

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**Reasoning:** The court noted that the Financial Creditors did not produce supporting proof of

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**Interpretation:** The court interpreted the relevant provisions of the Insolvency and Bankruptcy

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**Application:** The court applied the legal principles to the facts of the case, considering

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## Parties

- **Judges:** Jinan…; Harish Chander…
- **Appellants:** Kunal Finance and…
- **Respondents:** TIRUMALA PROJECTS…; M/S. TIRUMALA…

## Timeline

- **2013-12-27 — Loan Disbur…**: Financial Creditors disbursed…
- **2017-08-01 — Interest Rate…**: Interest rate reduced…

## 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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