# In the matter of Kriti Prakashan Private Limited CP (IB) NO.33-ALD-2021

> NCLT judgment dated 2022-06-13. Citation: TCN-2022-NCLT-02257. The case pertains to an application filed by Small Industries Development Bank of India…

- **Court:** NCLT
- **Order date:** 13 Jun 2022
- **Citation:** TCN-2022-NCLT-02257
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/kriti-prakashan-private-limited-cp-ib-no33-ald-2021-bc9e609b

## Summary

### Background

The case pertains to an application filed by Small Industries Development Bank of India (SIDBI), the Financial Creditor, under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, seeking initiation of the Corporate Insolvency Resolution Process (CIRP) against Kriti Prakashan Private Limited, the Corporate Debtor. The Corporate Debtor had approached the Financial Creditor for financial assistance, which was approved, and a loan of ₹1,00,00,000/- was disbursed. The Corporate Debtor failed to pay the first annual installment, leading to the account being declared NPA. Despite attempts at restructuring, the conditions for implementation were not met.

## Facts

Kriti Prakashan Private Limited (Corporate Debtor) approached Small Industries Development Bank of India (SIDBI) (Financial Creditor) on 27.11.2015 for financial assistance. SIDBI approved the request on 24.10.2016 and disbursed a loan of ₹1,00,00,000 on 22.11.2016. The loan repayment was structured with a moratorium period, followed by four annual installments of ₹25,00,000 each, plus monthly interest payments. The Corporate Debtor defaulted on the first annual installment, leading SIDBI to classify the account as NPA in February 2019. Restructuring talks failed, and SIDBI issued a letter on 02.09.2019, which was replied to by the Corporate Debtor on 16.09.2019, admitting the inability to pay the July 2019 interest installment due to financial constraints. The

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## Issues and analysis

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

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

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**Reasoning:** The court considered the submissions and material on record, noting that the loan was

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**Interpretation:** Section 7 provides a mechanism for financial creditors to recover their dues by

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**Application:** The court found that the Financial Creditor had met the requirements of Section

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## Parties

- **Judges:** Rajasekha…; Virendra Kumar…
- **Respondents:** Kriti Prakashan…

## Timeline

- **2015-11-27 — Application for…**: Corporate Debtor approached Financial…
- **2016-10-24 — Approval of Financial…**: Financial Creditor approved the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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