# In the matter of Bazargoan Paper and Pulp Mills Pvt. Ltd. C.P.(IB) -196-MB-2021

> NCLT judgment dated 2023-02-03. Citation: TCN-2023-NCLT-04797. Alka Prakash Agarwal, the Financial Creditor/Petitioner, filed a Company Petition under Section…

- **Court:** NCLT
- **Order date:** 3 Feb 2023
- **Citation:** TCN-2023-NCLT-04797
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/bazargoan-paper-and-pulp-mills-pvt-ltd-cpib-196-mb-2021-5cb433d7

## Summary

### Background

Alka Prakash Agarwal, the Financial Creditor/Petitioner, filed a Company Petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Bazargaon Paper & Pulp Mills Pvt. Ltd, the Corporate Debtor, due to an unresolved Financial Debt of Rs. 1,17,76,398/-. The Corporate Debtor failed to appear before the Bench despite valid notice. The Petitioner demonstrated the existence of the debt through various documents, including ledger statements and tax statements.

## Facts

The Corporate Debtor, Bazargaon Paper & Pulp Mills Pvt. Ltd, engaged in manufacturing paper and paper products, faced financial difficulties and approached the Petitioner, Alka Prakash Agarwal, for an unsecured loan of Rs. 70,00,000/-. This loan was to be repayable on demand with interest rates varying from 15% to 24% per annum. The loan was disbursed in tranches between October 2010 and April 2012. While the Corporate Debtor paid interest, they failed to deposit the Tax Deducted at Source (TDS) for some years. The Petitioner had to pay the TDS amount along with penalties to the Income Tax Department on behalf of the Corporate Debtor. As of the date of filing the petition, the Corporate Debtor still owed a principal amount of Rs. 41,28,021/- along with an interest

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor defaulted on …

**Ratio:** The Insolvency and Bankruptcy Code, 2016 defines 'default' as non-payment of debt when it

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**Reasoning:** The court considered the documents submitted by the Petitioner, including ledger

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**Interpretation:** The term 'default' under the IBC is interpreted strictly to mean non-payment of

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**Application:** In this case, the Petitioner provided sufficient evidence to prove that the

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## Parties

- **Judges:** Kuldip Kumar…; ANURADHA SANJAY…
- **Appellants:** Alka Prakash…
- **Respondents:** Bazargaon Paper &…; Bazargoan Paper &…
- **Advocates:** Fatima Baro…

## Timeline

- **2010-10-16 — Loan Disbur…**: Rs. 50,00,000/- disbursed…
- **2011-05-05 — Loan Disbur…**: Rs. 5,00,000/- disbursed…

## 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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