# In the matter of PAE Limited

> NCLT judgment dated 2024-04-22. Citation: TCN-2024-NCLT-01651. ALP Acres & Landlines Private Limited, the Financial Creditor, filed an application under…

- **Court:** NCLT
- **Order date:** 22 Apr 2024
- **Citation:** TCN-2024-NCLT-01651
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/pae-limited-8b628d1e

## Summary

### Background

ALP Acres & Landlines Private Limited, the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against PAE Limited, the Corporate Debtor. The Financial Creditor had extended an Inter-Corporate Deposit (ICD) of Rs. 2.50 crores to the Corporate Debtor under an agreement dated 09.06.2016, with an interest rate of 14% per annum for a period of 270 days. The Corporate Debtor repaid some amount but failed to pay the rest, leading to a claimed outstanding of Rs. 1,69,95,432 as of 10.03.2023.

## Facts

ALP Acres & Landlines Private Limited (Financial Creditor) extended an Inter-Corporate Deposit (ICD) of Rs. 2.50 crores to PAE Limited (Corporate Debtor) on 09.06.2016 for 270 days at 14% interest per annum. The agreement was formalized through an 'Agreement for ICD' dated 09.06.2016. The ICD matured in March 2017 and was renewed for another year at 12% per annum. The Corporate Debtor repaid Rs. 2.50 crores on 14.03.2022, which was adjusted towards interest and principal. As of 31.03.2023, Rs. 1,69,95,432 remained outstanding. The Corporate Debtor requested renewal of ICD from year to year and also requested a one-year period for payment of the balance debt on 20.03.2022. The Corporate Debtor deposited TDS till 31.03.2022 against the interest payable to the

…

## Issues and analysis

### Issue 1: Whether the 'inability to pay' debt can be pleaded as a valid defense by the Corporate Debtor …

**Ratio:** The judgment of the Hon'ble Apex Court in Swiss Ribbons Pvt. Ltd. Vs. Union of India

…

**Reasoning:** The Adjudicating Authority reasoned that the legislative policy has moved away from the

…

**Interpretation:** The legal issue revolves around the interpretation of Section 7 of the IBC,

…

**Application:** The Corporate Debtor's argument of 'inability to pay' due to the Covid-19

…

## Parties

- **Judges:** K. R. SAJI…; SANJIV…
- **Appellants:** ALP ACRES &…
- **Respondents:** PAE LIM…

## Timeline

- **2016-06-09 — ICD Agre…**: Financial Creditor extended ICD of Rs. 2.50 crores to Corporate Debtor at 14% interest…
- **2017-03-01 — ICD Renewal…**: Corporate Debtor requested renewal of…

## Legal provisions

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

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/pae-limited-8b628d1e