# In the matter of Vijay Engineering Enterprises Pvt. Ltd. CP (IB)1712-MB-C-IV-2019

> NCLT judgment dated 2019-08-09. Citation: TCN-2019-NCLT-01982. The case involves a petition filed under Section 7 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 9 Aug 2019
- **Citation:** TCN-2019-NCLT-01982
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/vijay-engineering-enterprises-pvt-ltd-cp-ib1712-mb-c-iv-2019-e91b0ef4

## Summary

### Background

The case involves a petition filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, by Vidarbha Diagnostics Pvt. Ltd. (Financial Creditor) against Vijay Engineering Enterprises Pvt. Ltd. (Corporate Debtor) to initiate Corporate Insolvency Resolution Process (CIRP). The basis for the petition is the Corporate Debtor's failure to repay a loan of Rs. 33,00,000/- principal and Rs. 3,90,576/- interest, with a default date of 31.07.2018. The petition was filed on 30.04.2019.

## Facts

Vidarbha Diagnostics Pvt. Ltd. (Financial Creditor) filed a petition against Vijay Engineering Enterprises Pvt. Ltd. (Corporate Debtor) under Section 7 of the Insolvency and Bankruptcy Code, 2016. The Financial Creditor disbursed a loan of Rs. 33,00,000/- to the Corporate Debtor under a loan agreement dated 14.09.2017. The loan carried an interest rate of 15% per annum and was repayable by 31.07.2018. The Corporate Debtor issued two post-dated cheques as security: Cheque No. 000780 for Rs. 33,00,000/- and Cheque No. 000161 for Rs. 3,90,576/-, both dated 31.07.2018. The Corporate Debtor defaulted on repayment on 31.07.2018. The Financial Creditor sent letters to the Corporate Debtor demanding payment. The Corporate Debtor acknowledged the debt but cited financial

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor defaulted on its payment obligations to the Financial Creditor, thus …

**Ratio:** The ratio is based on the Supreme Court's judgment in Innoventive Industries Limited V.

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**Reasoning:** The court reasoned that the Financial Creditor provided sufficient evidence of the loan

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**Interpretation:** The interpretation of Section 7 of the IBC, as clarified by the Supreme Court,

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**Application:** In this case, the Financial Creditor demonstrated the existence of a financial

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## Parties

- **Judges:** Rajasekha…; Ravikumar…; +1 more
- **Appellants:** Vidarbha Diagnosti…
- **Respondents:** Vijay Engineering…

## Timeline

- **2017-09-14 — Loan Agre…**: Loan agreement between Vidarbha Diagnostics Pvt. Ltd. and Vijay Engineering Enterprises…
- **2018-07-31 — Default…**: The Corporate Debtor defaulted…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 3(11) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-3)

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