# In the matter of Venky Hi-Tech Ispat Ltd. CP (IB) No. 158-KB-2018

> NCLT judgment dated 2018-05-08. Citation: TCN-2018-NCLT-01440. The case involves an application filed under Section 7(1) of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 8 May 2018
- **Citation:** TCN-2018-NCLT-01440
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/venky-hi-tech-ispat-ltd-cp-ib-no-158-kb-2018-3f2857dc

## Summary

### Background

The case involves an application filed under Section 7(1) of the Insolvency and Bankruptcy Code, 2016, by Laxmi Grasslands Private Ltd. (Financial Creditor) against Venky Hi-Tech Ispat Ltd. (Corporate Debtor) for initiating the Corporate Insolvency Resolution Process (CIRP). The Financial Creditor claims that the Corporate Debtor defaulted on a payment of Rs. 17,11,891/- which includes interest calculated up to December 31, 2017. The loan was extended as a Temporary Accommodation Loan with an interest rate of 12% p.a. for 120 days. The Corporate Debtor partly paid Rs. 10 lakhs out of the total outstanding loan of Rs. 25 lakhs.

## Facts

Laxmi Grasslands Private Ltd. (Financial Creditor) filed an application against Venky Hi-Tech Ispat Ltd. (Corporate Debtor) under Section 7(1) of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP). The Financial Creditor claimed a default of Rs. 17,11,891/-, including principal and interest calculated up to December 31, 2017. The debt arose from a Temporary Accommodation Loan of Rs. 25 lakhs extended at an interest rate of 12% p.a. for 120 days, disbursed on March 1, 2014. The Corporate Debtor made a partial payment of Rs. 10 lakhs on November 22, 2017, leaving a balance outstanding. The Financial Creditor provided documentary evidence, including bank statements, receipts of interest, and ledger copies, to

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## Issues and analysis

### Issue 1: Whether the Financial Creditor has proven the existence of a debt and default by the Corporate …

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

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**Reasoning:** The court examined the evidence presented by the Financial Creditor, including bank

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**Interpretation:** Section 7 requires the Adjudicating Authority to be satisfied that a default

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**Application:** The Financial Creditor provided sufficient evidence to prove the existence of a

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## Parties

- **Judges:** Jinan…; Madan B.…
- **Appellants:** Laxmi Grasslands…
- **Respondents:** Venky Hi-Tech…
- **Advocates:** Sailendra…; Sourav…

## Timeline

- **2014-03-01 — Loan Disbur…**: Laxmi Grasslands Private Ltd. disbursed a Temporary Accommodation Loan of Rs. 25 lakhs to…
- **2017-09-16 — Notice for…**: Financial Creditor sent a notice for refund of Inter Corporate deposit of outstanding…

## 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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