# In the matter of Jivanjyot Motors Private Ltd. CP (IB) 114-NCLT-AHM-2021

> NCLT judgment dated 2022-10-20. Citation: TCN-2022-NCLT-00653. Akzo Nobel India Limited filed an application under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 20 Oct 2022
- **Citation:** TCN-2022-NCLT-00653
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/jivanjyot-motors-private-ltd-cp-ib-114-nclt-ahm-2021-a71e22e7

## Summary

### Background

Akzo Nobel India Limited filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against Jivanjyot Motors Private Limited. The application was based on the corporate debtor's failure to comply with the terms and conditions of agreements dated 07.12.2016 and 04.05.2019, and promissory notes of the same dates, whereby the corporate debtor agreed to pay Rs. 35,00,000/- and Rs. 1,20,00,000/- to the applicant. The applicant claimed that the corporate debtor was in default of Rs. 1,55,00,000/-.

## Facts

Akzo Nobel India Limited (the applicant) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) to initiate Corporate Insolvency Resolution Process (CIRP) against Jivanjyot Motors Private Limited (the corporate debtor). The application was based on two agreements dated 07.12.2016 and 04.05.2019, and promissory notes of the same dates. According to the agreements, the applicant had extended trade advances to the corporate debtor, totaling Rs. 35,00,000/- and Rs. 1,20,00,000/-, respectively. The corporate debtor was required to place purchase orders for certain quantities of the applicant's products. The corporate debtor failed to comply with the terms of the agreements and promissory notes, leading to a total outstanding principal amount

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## Issues and analysis

### Issue 1: Whether the application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 is …

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

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**Reasoning:** The NCLT found that the corporate debtor had admitted the debt and had not raised any

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**Interpretation:** Section 7 provides the mechanism for a financial creditor to trigger the

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**Application:** The NCLT applied Section 7 to the facts, noting the admission of debt by the

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## Parties

- **Judges:** DEEPTI M…; Ajai Das Me…
- **Appellants:** Akzo Nobel India…
- **Respondents:** Jivanjyot Motors…

## Timeline

- **2016-12-07 — First Agr…**: First agreement executed between the applicant, corporate debtor, and M/s. Shree Milap…
- **2019-05-04 — Second Agr…**: Second agreement executed between the applicant, corporate debtor, and M/s. Shree Milap…

## 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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