# In the matter of Powersoft IT Private Limited C.P. 43 OF 2021

> NCLT judgment dated 2023-02-15. Citation: TCN-2023-NCLT-04589. IBM India Private Limited filed a Company Petition under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 15 Feb 2023
- **Citation:** TCN-2023-NCLT-04589
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/powersoft-it-private-limited-cp-43-of-2021-036f7b57

## Summary

### Background

IBM India Private Limited filed a Company Petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Powersoft IT Private Limited, claiming a financial debt of Rs. 72,17,315.03. The petitioner and respondent had entered into a Term Lease Master Agreement (TLMA) dated 28.10.2011. A Master Financing Agreement (MFA) dated 03.12.2014 was also executed wherein the Respondent was the borrower. The petitioner claimed entitlement to Rs. 72,17,315.03, including late payment fees under the MFA, with Rs. 52,49,175.89 as principal and Rs. 19,68,139.14 as late payment fee. The respondent argued that the debt was not a financial debt but related to services and was barred by limitation. The

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## Facts

IBM India Private Limited (Petitioner) filed a Company Petition seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Powersoft IT Private Limited (Corporate Debtor) for an unresolved financial debt of Rs. 72,17,315.03. The Petitioner and Respondent entered into a Term Lease Master Agreement (TLMA) on 28.10.2011. Hubtown Limited executed a corporate guarantee on 29.09.2011 in favor of the Petitioner. A Master Financing Agreement (MFA) was executed on 03.12.2014, with the Respondent as the borrower. As per TLMA Clause 31, the Petitioner could levy a 2% monthly late payment fee. The Petitioner issued a demand letter on 08.01.2019, calling for payment by 18.01.2019, and another to the Corporate Guarantor on 18.01.2019, demanding payment by 25.01.2019.

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## Issues and analysis

### Issue 1: Whether the petition meets the threshold limit for initiating CIRP, considering the notification …

**Ratio:** The notification dated 24th March 2020, enhanced the threshold limit for initiating CIRP

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**Reasoning:** The NCLT reasoned that the amount claimed by the Petitioner was less than one crore,

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**Interpretation:** The notification clearly provided a cut-off date that after the issuance of the

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**Application:** Since the amount claimed was less than one crore, the petition was not

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## Parties

- **Judges:** Kuldip Kumar…; ANURADHA SANJAY…
- **Appellants:** IBM India Private…
- **Respondents:** Powersoft IT…
- **Advocates:** Shami…; Rakesh S…; +4 more

## Timeline

- **2011-10-28 — Term Lease Master…**: The Petitioner and Respondent entered into…
- **2011-09-29 — Corporate Gu…**: Hubtown Limited executed a corporate…

## 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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