# In the matter of Kasargod Power Corporation Limited

> NCLT judgment dated 2024-01-19. Citation: TCN-2024-NCLT-02975. The case involves a petition filed by M/s. M.M.S. Steel & Power Private Limited, the Financial…

- **Court:** NCLT
- **Order date:** 19 Jan 2024
- **Citation:** TCN-2024-NCLT-02975
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/kasargod-power-corporation-limited-ac902462

## Summary

### Background

The case involves a petition filed by M/s. M.M.S. Steel & Power Private Limited, the Financial Creditor, against M/s. Kasargod Power Corporation Limited, the Corporate Debtor, under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP). The Financial Creditor claims a default amount of Rs. 7,57,63,243/- in respect of a credit facility availed by the Corporate Debtor. The Corporate Debtor had taken a loan of Rs. 4,25,00,000/- from the Financial Creditor in 2016, agreeing to repay it with 18% interest per annum. The Corporate Debtor made partial payments but failed to repay the outstanding amount by the due date of 20.06.2021. The Financial Creditor sent letters and demand notices, but the Corporate

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## Facts

M/s. M.M.S. Steel & Power Private Limited (Financial Creditor) filed a petition against M/s. Kasargod Power Corporation Limited (Corporate Debtor) under Section 7 of the Insolvency and Bankruptcy Code, 2016. The Corporate Debtor availed a loan of Rs. 4,25,00,000/- from the Financial Creditor on 20.06.2016, with an agreement to repay it with 18% interest within 5 years. The Financial Creditor disbursed Rs. 4,24,66,081/- between 30.06.2016 and 02.04.2019. The Corporate Debtor repaid Rs. 25,00,000/-, leaving a principal amount of Rs. 3,99,66,081/- outstanding. The repayment due date was 20.06.2021. The Corporate Debtor failed to repay the outstanding amount, leading the Financial Creditor to send a letter on 22.06.2021 demanding repayment. The Corporate Debtor

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor under Section 7 of the Insolvency and …

**Ratio:** Section 7 of the IBC allows a financial creditor to initiate CIRP against a corporate

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**Reasoning:** The NCLT considered the documents and evidence presented by the Financial Creditor,

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**Interpretation:** Section 7 of the IBC is interpreted to provide a mechanism for financial

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**Application:** In this case, the Financial Creditor provided sufficient evidence of the loan

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## Parties

- **Judges:** Shyam Babu…; T Krishna…
- **Appellants:** M/s. M.M.S. Steel…
- **Respondents:** M/s. Kasargod…

## Timeline

- **2016-06-20 — Loan Agre…**: Corporate Debtor availed a loan of Rs.…
- **2016-06-30 — Disbursemen…**: Financial Creditor started…

## 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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