# In the matter of Concord Creations (India) Private Limited CP (IB) No. 61-BB-2020

> NCLT judgment dated 2022-05-31. Citation: TCN-2022-NCLT-02525. The case involves a petition filed by M/s. Drip Capital Inc., a Financial Creditor, under…

- **Court:** NCLT
- **Order date:** 31 May 2022
- **Citation:** TCN-2022-NCLT-02525
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/concord-creations-india-private-limited-cp-ib-no-61-bb-2020-0edfd8fa

## Summary

### Background

The case involves a petition filed by M/s. Drip Capital Inc., a Financial Creditor, under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against M/s. Concord Creations (India) Private Limited, the Corporate Debtor. The Financial Creditor had granted an Export Finance facility to the Corporate Debtor under a Receivable Purchase Factoring Agreement (RPA). A default occurred when Aquarius USA Inc., who purchased goods under invoices assigned to the Financial Creditor, disputed the invoices and failed to make payments. The Financial Creditor then exercised its right of recourse against the Corporate Debtor, who also failed to make payments.

## Facts

M/s. Drip Capital Inc. (Financial Creditor) filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s. Concord Creations (India) Private Limited (Corporate Debtor). The Corporate Debtor was incorporated on 08.12.2005. The Financial Creditor had granted an Export Finance facility to the Corporate Debtor under a Receivable Purchase Factoring Agreement (RPA) dated 12.12.2018. The Corporate Debtor defaulted on a payment of Rs. 27,39,899.33. The receivables under invoices were assigned by the Corporate Debtor to the Financial Creditor on a with-recourse basis. Aquarius USA Inc., who purchased goods under the invoices, disputed the invoices and failed to make payments. The Financial

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority was correct in initially disposing of the petition by directing …

**Ratio:** The NCLAT held that the Adjudicating Authority should have admitted the petition if the

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**Reasoning:** The NCLAT found that the Adjudicating Authority's initial order was not in accordance

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**Interpretation:** The interpretation is that if a default has occurred and the application is

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**Application:** The NCLAT applied this interpretation by setting aside the Adjudicating

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## Parties

- **Judges:** Ajay Kumar…; Manoj Kumar…
- **Appellants:** M/s.Drip Capital…
- **Respondents:** M/s. Concord…

## Timeline

- **2005-12-08 — Incorporation of…**: M/s. Concord Creations (India)…
- **2018-12-12 — Receivable Purchase…**: Financial Creditor granted an Export Finance facility to the Corporate Debtor under a…

## 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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