# In the matter of KATYAYNI NATURAL RESOURCES LIMITED

> NCLT judgment dated 2025-05-22. Citation: TCN-2025-NCLT-00053. Gokul Sai Udyog LLP, the Financial Creditor (FC), filed an application under Section 7 of the…

- **Court:** NCLT
- **Order date:** 22 May 2025
- **Citation:** TCN-2025-NCLT-00053
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/katyayni-natural-resources-limited-28f9f9e5

## Summary

### Background

Gokul Sai Udyog LLP, the Financial Creditor (FC), filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against Katyani Natural Resources Limited, the Corporate Debtor (CD). The FC claimed that the CD had approached it for financial assistance in the form of a loan of Rs. 4 Crores for business purposes. After negotiations, it was agreed that the FC would disburse Rs. 4 Crores, to be repaid with 12% interest per annum within 6 months from the first transfer. The disbursement was made in three tranches. The FC claimed the CD defaulted in repaying the amount. The FC issued a legal notice on 14.04.2022 demanding repayment of Rs. 1.23 Crores with interest. The CD replied on

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## Facts

Gokul Sai Udyog LLP (Financial Creditor) claimed Katyani Natural Resources Limited (Corporate Debtor) approached them for a Rs. 4 Crore loan. An agreement was reached for disbursement of Rs. 4 Crores with 12% annual interest, repayable within 6 months of the first transfer. The disbursement occurred in three tranches. The Financial Creditor provided bank statements as proof. The Corporate Debtor allegedly defaulted on repayment. The Financial Creditor issued a legal notice on 14.04.2022 demanding Rs. 1.23 Crores with interest. The Corporate Debtor replied on 05.05.2022, alleging the transaction was for material supply. A further demand notice was issued on 18.06.2022. The Corporate Debtor's financial statements allegedly acknowledged the debt. The outstanding amount

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## Issues and analysis

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

**Ratio:** The essential condition for initiating CIRP is the existence of a financial debt and a

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**Reasoning:** The Tribunal found that there was a disbursal of Rs. 4 Crores from the Financial Creditor

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

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**Application:** In this case, the Tribunal found that the Financial Creditor had disbursed Rs.

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## Parties

- **Judges:** BIDISHA BA…; Cmde Siddharth…
- **Appellants:** Gokul Sai Udyog…
- **Respondents:** Katyani Natural…

## Timeline

- **2017-10-18 — Letter of Intent (LoI)…**: Letter of Intent (LoI) dated 18.10.2017 bearing number 1808/Khanij-30, Banda was issued…
- **2017-01-23 — Disbursement of loan…**: First tranche of Rs. 1,50,00,000.00…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 8 — Insolvency resolution by operational creditor](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-8)

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