# In the matter of Pansy Construction Private Limited

> NCLT judgment dated 2023-09-27. Citation: TCN-2023-NCLT-01458. The case pertains to an application filed by M/s. Fun N Food Private Limited, the Financial…

- **Court:** NCLT
- **Order date:** 27 Sept 2023
- **Citation:** TCN-2023-NCLT-01458
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/pansy-construction-private-limited-6439f985

## Summary

### Background

The case pertains to an application filed by M/s. Fun N Food Private Limited, the Financial Creditor, under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against M/s. Pansy Construction Private Limited, the Corporate Debtor, for non-payment of a debt amounting to Rs. 1,62,79,517/-. The Financial Creditor had sanctioned a loan facility of Rs. 1,45,00,000/- to the Corporate Debtor, which was disbursed vide a Loan Agreement dated 01.04.2021. The Corporate Debtor failed to repay the loan amount, leading the Financial Creditor to recall the loan vide notice dated 22.02.2022.

## Facts

M/s. Fun N Food Private Limited (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s. Pansy Construction Private Limited (Corporate Debtor) due to non-payment of debt. The Financial Creditor sanctioned a loan facility of Rs. 1,45,00,000/- to the Corporate Debtor, disbursed via a Loan Agreement dated 01.04.2021. An amount of Rs. 1,42,70,000/- was disbursed. The Corporate Debtor failed to repay the loan, leading the Financial Creditor to recall the loan via notice dated 22.02.2022. The Loan Agreement stipulated repayment of the disbursed amount with interest by 31.12.2021 and quarterly interest payments in advance at 12% per annum. The Financial

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor under Section 7 of the Insolvency and …

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

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**Reasoning:** The Adjudicating Authority considered the documents and submissions made by the Financial

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**Interpretation:** Section 7 of the IBC provides a mechanism for financial creditors to recover

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**Application:** The Financial Creditor, M/s. Fun N Food Private Limited, filed the application

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## Parties

- **Judges:** BACHU VENKAT…; ATUL CHAT…
- **Respondents:** Pansy Construction…; Pansy Construction…

## Timeline

- **2021-04-01 — Loan Agreeme…**: Loan Agreement executed between…
- **2021-04-05 — Disbursal of Lo…**: Rs. 30,00,000 disbursed to the…

## 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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