# In the matter of Nava Healthcare Private Limited Company Petition No. (IB)-231(ND)-2023

> NCLT judgment dated 2023-07-03. Citation: TCN-2023-NCLT-02719. M/s Shree Krishna Automobiles, through its partner Sh. Rajesh Jindal, filed a petition under…

- **Court:** NCLT
- **Order date:** 3 Jul 2023
- **Citation:** TCN-2023-NCLT-02719
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/nava-healthcare-private-limited-company-petition-no-ib-231nd-2023-37aa5fbf

## Summary

### Background

M/s Shree Krishna Automobiles, through its partner Sh. Rajesh Jindal, filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s Nava Healthcare Private Limited. The applicant's claim arises from a security deposit placed with the respondent under an agreement where the applicant acted as a Clearing & Forwarding Agent/Mother Warehouse (CFA) for the respondent's products. The respondent allegedly failed to make regular payments for CFA services and did not refund the security deposit after the termination of the agreement.

## Facts

M/s Shree Krishna Automobiles (Applicant) and M/s Nava Healthcare Private Limited (Respondent) entered into an agreement on 01.03.2020, where the Applicant was appointed as the Clearing & Forwarding Agent/Mother Warehouse (CFA) for the Respondent's products. The Applicant placed a security deposit of Rs. 2,00,00,000/- in four installments. Due to non-payment of regular CFA service payments, the Applicant terminated the agreement on 02.07.2021 and demanded the refund of the security deposit along with interest. The Respondent failed to refund the deposit. The Applicant filed a Section 9 petition earlier, which was dismissed. Subsequently, a Section 7 petition was filed and withdrawn with the liberty to file a fresh petition. The Respondent argued that the

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## Issues and analysis

### Issue 1: Whether the application is maintainable under Section …

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

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**Reasoning:** The court found that the applicant, being a financial creditor, had established a default

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**Interpretation:** Section 7 provides the mechanism for financial creditors to trigger the

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**Application:** The court applied Section 7 by verifying that the applicant was a financial

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## Parties

- **Judges:** SH. ASHOK KUMAR…; SH. L. N.…
- **Appellants:** M/s Shree Krishna…
- **Respondents:** Nava Healthcare…

## Timeline

- **2020-03-01 — Agreement…**: Agreement between M/s Shree Krishna…
- **2020-03-01 — Security Deposit…**: First installment of…

## 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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