# In the matter of Mayur Ply Industries Private Limited I.A. No. 1046-KB-2021 in CP (IB) NO. 1874-KB-2019

> NCLT judgment dated 2022-07-18. Citation: TCN-2022-NCLT-01662. Consolidated Infracon Private Limited, the Financial Creditor, filed an application under…

- **Court:** NCLT
- **Order date:** 18 Jul 2022
- **Citation:** TCN-2022-NCLT-01662
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/mayur-ply-industries-private-limited-ia-no-1046-kb-2021-in-cp-ib-no-1874-kb-2019-67399747

## Summary

### Background

Consolidated Infracon Private Limited, the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Mayur Ply Industries Private Limited, the Corporate Debtor, for initiation of the Corporate Insolvency Resolution Process (CIRP). The Financial Creditor claimed a total sum of Rs. 53,72,329/- as the outstanding debt. The Corporate Debtor, in its reply, submitted that the application was not maintainable due to a bona fide dispute regarding the default amount. The Corporate Debtor also filed an interlocutory application seeking dismissal of the insolvency application, citing an amicable settlement where it proposed to pay the entire sum in installments. The Financial Creditor had also initiated proceedings under Section

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## Facts

Consolidated Infracon Private Limited (Financial Creditor) extended a loan of Rs. 50,00,000/- to Mayur Ply Industries Private Limited (Corporate Debtor) via Inter Corporate Deposit on September 1, 2018, with a maturity date of December 2, 2018. The interest rate was agreed at 9% per annum, repayable with interest on December 3, 2018. The Corporate Debtor defaulted on repayments. The Financial Creditor filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, claiming a total default of Rs. 53,72,329/-, including principal and accrued interest. The Corporate Debtor, without disputing the loan's existence, claimed a bona fide dispute regarding the default amount and proposed an amicable settlement with installment payments. The Corporate Debtor

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## Issues and analysis

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

**Ratio:** Insolvency proceedings are not recovery proceedings and should not be misused to extort

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**Reasoning:** The court reasoned that since the Corporate Debtor had paid the entire sum claimed by the

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**Interpretation:** The interpretation is that once the entire amount claimed in the Section 7

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**Application:** The ratio and reasoning were applied to the specific facts of the case, where

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## Parties

- **Judges:** Rohit K…; Harish Chander…; +1 more
- **Respondents:** Mayur Ply…

## Timeline

- **2018-09-01 — Inter Corporat…**: Financial Creditor extended a loan of…
- **2018-12-02 — Maturity…**: Maturity date of the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(8) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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