# In the matter of New Hind Silk House Private Limited C.P (IB) No. 299-KB-2022

> NCLT judgment dated 2023-04-26. Citation: TCN-2023-NCLT-03613. The case involves a petition filed by Rahul Carbon Commercials Private Limited ('Financial…

- **Court:** NCLT
- **Order date:** 26 Apr 2023
- **Citation:** TCN-2023-NCLT-03613
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/new-hind-silk-house-private-limited-cp-ib-no-299-kb-2022-04575959

## Summary

### Background

The case involves a petition filed by Rahul Carbon Commercials Private Limited ('Financial Creditor') under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process ('CIRP') against New Hind Silk House Private Limited ('Corporate Debtor'). The Financial Creditor claimed that the Corporate Debtor availed financial assistance of Rs. 1,00,00,000, with a total default amount of Rs. 1,26,35,000 including interest. The date of default was stated as April 1, 2022. The Corporate Debtor acknowledged receiving the financial assistance but cited business downturn and the COVID-19 pandemic as reasons for their inability to repay.

## Facts

Rahul Carbon Commercials Private Limited ('Financial Creditor') filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process ('CIRP') against New Hind Silk House Private Limited ('Corporate Debtor'). The Corporate Debtor availed financial assistance of Rs. 1,00,00,000 from the Financial Creditor. The total amount in default was Rs. 1,26,35,000, including interest, with the date of default being April 1, 2022. The Financial Creditor proposed terms and conditions in a letter dated April 2, 2018, which the Corporate Debtor accepted via a letter dated April 3, 2018. The Financial Creditor disbursed Rs. 1,00,00,000 on April 3, 2018, with a 10% annual interest rate, repayable by March 31, 2022. The

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

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**Reasoning:** The court found that the Financial Creditor had disbursed a loan to the Corporate Debtor,

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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 applied Section 7 to the facts of the case, finding that the

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## Parties

- **Judges:** BIDISHA BA…; RAHUL BHA…
- **Appellants:** Rahul Carbon…
- **Respondents:** New Hind Silk…
- **Advocates:** Aritra…; Debraj…; +4 more

## Timeline

- **2018-04-02 — Financial Creditor's…**: Financial Creditor proposed terms and conditions for financial assistance to the…
- **2018-04-03 — Corporate Debtor's…**: Corporate Debtor accepted the terms and…

## 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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