# In the matter of KLM Holdings Pvt. Ltd.

> NCLT judgment dated 2023-12-06. Citation: TCN-2023-NCLT-00415. The case pertains to an application filed under Section 7 of the Insolvency and Bankruptcy Code…

- **Court:** NCLT
- **Order date:** 6 Dec 2023
- **Citation:** TCN-2023-NCLT-00415
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/klm-holdings-pvt-ltd-353c8607

## Summary

### Background

The case pertains to an application filed under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, by BCL Interprises Ltd. (Financial Creditor) against KLM Holdings Pvt. Ltd. (Corporate Debtor) for initiation of the Corporate Insolvency Resolution Process (CIRP). The Financial Creditor disbursed a loan of Rs. 1,10,00,000 to the Corporate Debtor, with the original date of default being 04.06.2023. The Corporate Debtor requested an extension of one month for repayment, which was granted by the Financial Creditor, shifting the default date to 04.07.2023. The Corporate Debtor failed to repay the loan, leading to the application for CIRP.

## Facts

BCL Interprises Ltd. (Financial Creditor) filed an application under Section 7 of the IBC, 2016, against KLM Holdings Pvt. Ltd. (Corporate Debtor) for initiating CIRP. The Financial Creditor disbursed a loan of Rs. 1,10,00,000 to the Corporate Debtor. The original date of default was 04.06.2023. The Corporate Debtor requested a one-month extension for repayment, which was granted, shifting the default date to 04.07.2023. The Corporate Debtor failed to repay the loan by the extended date. The Corporate Debtor argued that the petition was not maintainable because the account was not declared NPA before filing the petition. The Financial Creditor claimed a default of Rs. 1,14,52,840, including principal and interest. The Corporate Debtor admitted to availing the loan and

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## Issues and analysis

### Issue 1: Whether the petition under Section 7 of the IBC, 2016, is maintainable when the account of the …

**Ratio:** The declaration of an account as NPA is not a prerequisite for initiating CIRP under

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**Reasoning:** The Tribunal observed that Section 7 of the IBC, 2016, does not take into account the

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**Interpretation:** The interpretation of Section 7 of the IBC, 2016, focuses on the existence of a

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**Application:** In this case, the Corporate Debtor admitted to the disbursement of the loan and

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## Parties

- **Judges:** SH. ASHOK KUMAR…; SH. L. N.…
- **Appellants:** BCL Interprises…
- **Respondents:** KLM Holdings Pvt.…

## Timeline

- **2023-02-27 — Loan Appli…**: The Corporate Debtor applied for a…
- **2023-03-04 — Loan Agre…**: Loan Agreement dated…

## 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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