# In the matter of Dharmkalp Constructions And Consultancy Private Limited

> NCLT judgment dated 2024-09-26. Citation: TCN-2024-NCLT-00536. Visagar Financial Services Limited filed a Company Petition seeking to initiate Corporate…

- **Court:** NCLT
- **Order date:** 26 Sept 2024
- **Citation:** TCN-2024-NCLT-00536
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/dharmkalp-constructions-and-consultancy-private-limited-051086a3

## Summary

### Background

Visagar Financial Services Limited filed a Company Petition seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Dharmkalp Constructions and Consultancy, claiming a financial debt of Rs. 1,04,10,511/-. The date of default was 06.02.2024. The Corporate Debtor needed funds and obtained a loan from the Financial Creditor, issuing a cheque that was later dishonored with the remark 'FUNDS INSUFFICIENT'. Despite notices and attempts at settlement, the Corporate Debtor failed to repay the debt.

## Facts

Visagar Financial Services Limited (Financial Creditor) extended a loan to Dharmkalp Constructions and Consultancy (Corporate Debtor) for Rs. 1,02,00,000/- on 16.10.2023, carrying 9% interest per annum, repayable within three months. The Corporate Debtor issued a cheque for Rs. 1,04,10,511/- dated 17.01.2024, which was dishonored on 06.02.2024 due to 'FUNDS INSUFFICIENT'. The date of default is 06.02.2024. The Financial Creditor issued a notice under Section 138 of the Negotiable Instruments Act on 23.02.2024 and a demand letter on 14.03.2024. The Corporate Debtor admitted to approaching the Financial Creditor for a short-term loan and that the loan was due and payable. The Financial Creditor registered the default with NeSL on 08.04.2024. The Corporate Debtor resisted

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## Issues and analysis

### Issue 1: Whether the Financial Creditor has established the existence of a financial debt and default on the …

**Ratio:** Section 7 of the Insolvency and Bankruptcy Code, 2016 allows a financial creditor to

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**Reasoning:** The court found that the Financial Creditor presented sufficient evidence, including the

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**Interpretation:** Section 7 requires the financial creditor to demonstrate the existence of a

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**Application:** The court applied the ratio to the facts by considering the loan agreement, the

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## Parties

- **Judges:** Reeta K…; Madhu S…
- **Appellants:** Visagar Financial…
- **Respondents:** Dharmkalp…

## Timeline

- **2023-10-16 — Loan Agre…**: Financial Creditor extended…
- **2024-01-17 — Cheque D…**: Cheque No. 643879…

## 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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