# In the matter of Raghav Sarees Private Limited C.P (IB) No.1908-KB-2019

> NCLT judgment dated 2022-06-13. Citation: TCN-2022-NCLT-02252. Reliance Home Finance Limited filed an application under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 13 Jun 2022
- **Citation:** TCN-2022-NCLT-02252
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/raghav-sarees-private-limited-cp-ib-no1908-kb-2019-ab7b0110

## Summary

### Background

Reliance Home Finance Limited filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Raghav Sarees Private Limited, seeking initiation of the Corporate Insolvency Resolution Process (CIRP). The Financial Creditor claimed that the Corporate Debtor defaulted on loan repayments, leading to the account being classified as NPA. The Corporate Debtor contested the application, raising disputes regarding the default date and the validity of notices issued under the SARFAESI Act.

## Facts

Reliance Home Finance Limited (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Raghav Sarees Private Limited (Corporate Debtor). The Financial Creditor had granted credit facilities to the Corporate Debtor, which is engaged in the business of clothing and apparels, to the tune of Rs.1,75,00,000/-. A loan agreement was executed on 31.05.2017, with a sanction letter dated 23.05.2017. The Corporate Debtor initially made payments but defaulted from 5th August, 2018. The loan account became NPA on 8th January, 2019. The Financial Creditor issued a loan recall notice on 21st January, 2019, and a notice under Section 13(2) of the SARFAESI Act on 12th February, 2019. The Corporate Debtor claimed the demand notice

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor defaulted in repaying …

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

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**Reasoning:** The court noted that the Corporate Debtor admitted to being unable to repay the loan

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**Interpretation:** The existence of a financial debt and the occurrence of a default are the

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**Application:** The Corporate Debtor's admission of default and the Financial Creditor's

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## Parties

- **Judges:** Rohit K…; Harish Chander…; +1 more
- **Appellants:** Reliance Home…
- **Respondents:** Raghav Sarees…

## Timeline

- **2017-05-23 — Sanction Lett…**: Sanction letter issued for…
- **2017-05-31 — Loan Agreeme…**: Loan agreement executed between…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 11 — Persons not entitled to make application](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-11)

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