# In the matter of Pilot Mines & Minerals Private Limited Company Petition No. IB 237(PB)-2022

> NCLT judgment dated 2023-02-28. Citation: TCN-2023-NCLT-04423. The case involves a petition filed under Section 7 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 28 Feb 2023
- **Citation:** TCN-2023-NCLT-04423
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/pilot-mines-minerals-private-limited-company-petition-no-ib-237pb-2022-f7c2786a

## Summary

### Background

The case involves a petition filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, by BSFC Distributors Private Limited against Pilot Mines & Minerals Private Limited, seeking to initiate the Corporate Insolvency Resolution Process (CIRP). The petition was filed due to the Corporate Debtor's failure to repay a loan of Rs. 1,82,57,108/- as of 31.03.2021. The Corporate Debtor admitted to taking an unsecured loan of Rs. 1,50,00,000/- from the Financial Creditor, with an interest rate of 20% per annum, repayable by 31.03.2021. An Inter Corporate Deposit Agreement was executed, and a Demand Promissory Note was issued. The loan was disbursed on 04.02.2021. The Corporate Debtor sought extensions for repayment but failed to honor its commitments.

## Facts

BSFC Distributors Private Limited (Financial Creditor) filed a petition under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, against Pilot Mines & Minerals Private Limited (Corporate Debtor) due to a default in repayment of a loan. The Corporate Debtor had approached the Financial Creditor on 29.01.2021 for an unsecured loan of Rs. 1,50,00,000/- at an interest rate of 20% per annum, repayable by 31.03.2021. The Financial Creditor approved the loan on 01.02.2021, and an Inter Corporate Deposit Agreement was executed on 03.02.2021. The loan was disbursed on 04.02.2021. The Corporate Debtor failed to repay the loan by the due date, leading to a total outstanding of Rs. 1,82,57,108/- as of 31.01.2022. The Financial Creditor issued demand notices, but the

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## Issues and analysis

### Issue 1: Whether the petition filed by the Financial Creditor under Section 7 of the IBC, 2016, is …

**Ratio:** Section 7 of the IBC, 2016, allows a financial creditor to initiate CIRP against a

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**Reasoning:** The Adjudicating Authority found that the Financial Creditor had submitted sufficient

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

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**Application:** In this case, the Financial Creditor provided evidence of the loan agreement,

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## Parties

- **Judges:** Ramalingam…; AVINASH K.…
- **Appellants:** BSFC DISTRIBUTORS…
- **Respondents:** PILOT MINES &…

## Timeline

- **2021-01-29 — Loan Appli…**: Corporate Debtor approached Financial Creditor…
- **2021-02-01 — In-Principle…**: Financial Creditor gave…

## 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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