# In the matter of Harishankar Paper Products Private Limited CP (IB) No. 150-07-HDB-2020

> NCLT judgment dated 2022-04-13. Citation: TCN-2022-NCLT-03254. Indiabulls Consumer Finance Limited filed an application under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 13 Apr 2022
- **Citation:** TCN-2022-NCLT-03254
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/harishankar-paper-products-private-limited-cp-ib-no-150-07-hdb-2020-636ca532

## Summary

### Background

Indiabulls Consumer Finance Limited filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against Hari Shankar Paper Products Private Limited. The Corporate Debtor had approached the Financial Creditor for a business loan of Rs. 34,00,000 to meet business requirements. A loan agreement was executed, with the loan repayable in 35 equated monthly installments. The Corporate Debtor defaulted on payments, leading to the application before the NCLT.

## Facts

Hari Shankar Paper Products Private Limited (Corporate Debtor) approached Indiabulls Consumer Finance Limited (Financial Creditor) for a business loan of Rs. 34,00,000. A loan agreement was executed, with the loan repayable in 35 equated monthly installments. The Corporate Debtor defaulted on payments, with defaults occurring from 2018-10-05. The total amount in default was Rs. 35,92,190.01. Indiabulls Consumer Finance Limited filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate CIRP. Notice was served to the Corporate Debtor on 2021-11-15, but they failed to appear before the Adjudicating Authority. The matter was adjourned multiple times. The Corporate Debtor was set ex-parte on 2021-11-29. The Financial Creditor proposed the

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## Issues and analysis

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

**Ratio:** The principle that a default in repayment of a financial debt triggers the provisions of

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**Reasoning:** The court reviewed the loan agreement and the evidence of default provided by the

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**Interpretation:** The interpretation of Section 7 of the IBC requires the Adjudicating Authority

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**Application:** The court applied the ratio to the facts of the case, noting that the Corporate

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## Parties

- **Judges:** Venkata Ramakrishn…; BINOD KUMAR…
- **Appellants:** Indiabulls…
- **Respondents:** Hari Shanker…

## Timeline

- **2018-10-05 — Date of D…**: The Corporate Debtor defaulted on its…
- **2021-11-15 — Notice S…**: Notice was duly served…

## 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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