# In the matter of Aaban Apparels and Realcon Private Limited

> NCLT judgment dated 2024-02-07. Citation: TCN-2024-NCLT-02733. The case involves a petition filed by Vidhant Realty Private Limited (Financial…

- **Court:** NCLT
- **Order date:** 7 Feb 2024
- **Citation:** TCN-2024-NCLT-02733
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/aaban-apparels-and-realcon-private-limited-46fb3af8

## Summary

### Background

The case involves a petition filed by Vidhant Realty Private Limited (Financial Creditor/Petitioner) under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Aaban Apparels and Realcon Private Limited (Corporate Debtor/Respondent) due to default in repayment of a loan. The Corporate Debtor had approached the Financial Creditor for a loan of Rs. 1,00,00,000 for expanding its textile business. The Financial Creditor approved a loan of Rs. 60 Lakhs with an interest rate of 22% p.a., quarterly compounding. The Corporate Debtor acknowledged the receipt of the loan and assured repayment by 01.04.2021. However, the Corporate Debtor failed to repay the amount, leading to the issuance of recall notices and a

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## Facts

1. Vidhant Realty Private Limited (Financial Creditor) filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate CIRP against Aaban Apparels and Realcon Private Limited (Corporate Debtor) due to loan default.
2. The Corporate Debtor requested a loan of Rs. 1,00,00,000 from the Financial Creditor for business expansion on 21.08.2017.
3. The Financial Creditor approved a loan of Rs. 60 Lakhs with 22% p.a. interest, quarterly compounding, disbursed in installments during FY 2017-18, with bullet repayment within 4 years.
4. The Financial Creditor issued a letter on 25.08.2017, and the Corporate Debtor passed a board resolution on 24.10.2017 to avail the loan.
5. The Financial Creditor disbursed Rs. 60 Lakhs to the Corporate Debtor on

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## Issues and analysis

### Issue 1: Whether the petition is barred by limitation as …

**Ratio:** The cause of action arises on the date of

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**Reasoning:** The Corporate Debtor issued a Demand Promissory Note dated 15.11.2017, undertaking to

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**Interpretation:** The date of default, as specified in the DPN, determines the cause of action

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**Application:** Since the DPN specified 01.04.2021 as the repayment date, the cause of action

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## Parties

- **Judges:** Charanjeet Singh…; Smt Lakshmi…
- **Appellants:** M/s. Vidhant…
- **Respondents:** M/s. Aaban…

## Timeline

- **2017-08-21 — Loan Req…**: Corporate Debtor requests a loan of Rs.…
- **2017-08-25 — Loan App…**: Financial Creditor approves…

## 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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