# In the matter of Deccan Charters Private Limited

> NCLT judgment dated 2024-04-05. Citation: TCN-2024-NCLT-01803. The case involves an application filed by Krone Finstock Private Limited (Financial Creditor)…

- **Court:** NCLT
- **Order date:** 5 Apr 2024
- **Citation:** TCN-2024-NCLT-01803
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/deccan-charters-private-limited-5a5ed4f6

## Summary

### Background

The case involves an application filed by Krone Finstock Private Limited (Financial Creditor) under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Deccan Charters Private Limited (Corporate Debtor) due to a default of Rs. 9,82,24,077.47/-. The Corporate Debtor raised objections, primarily arguing that a Business Transfer Agreement (BTA) transferred the liability to GMDAPL, and the Tribunal lacks jurisdiction due to an ongoing arbitration. The Financial Creditor refuted the BTA's validity without their consent and highlighted the Corporate Debtor's default and dishonored cheques.

## Facts

Krone Finstock Private Limited (Financial Creditor) filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Deccan Charters Private Limited (Corporate Debtor) for a default of Rs. 9,82,24,077.47/-. The Financial Creditor is a Non-Banking Finance Company. The Corporate Debtor is engaged in the business of operation of chartered helicopters and fixed-wing charter services. The loan agreement was entered on 31.07.2018. The Financial Creditor disbursed loan amounts to the Corporate Debtor via NEFT on multiple dates in August 2018. The Corporate Debtor initially paid Rs. 3,07,800/- on 01.09.2018, adjusted against accrued interest. The Corporate Debtor handed over 4 cheques dated 28.10.2020 for Rs. 1,00,00,000/- each, which were dishonored on

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## Issues and analysis

### Issue 1: Whether the petition filed by the Financial Creditor under Section 7 of the IBC is maintainable …

**Ratio:** Clause 7.1 of the Loan Agreement stipulates that the borrower cannot assign its

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**Reasoning:** The Tribunal reasoned that the Corporate Debtor's reliance on the BTA was invalid because

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**Interpretation:** The interpretation of Clause 7.1 is that it creates a condition precedent for

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**Application:** The Tribunal applied this ratio to the facts by noting that the Financial

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## Parties

- **Judges:** K. Bi…; Manoj Kumar…
- **Appellants:** Krone Finstock…
- **Respondents:** Deccan Charters…

## Timeline

- **2018-07-31 — Loan Agreeme…**: Loan Agreement was entered into by the…
- **2018-07-19 — Initial Disbu…**: Financial Creditor forwarded Rs.…

## 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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