# In the matter of Raghupati Construction Private Limited

> NCLT judgment dated 2023-10-19. Citation: TCN-2023-NCLT-01103. The application was filed on 2023-06-13 under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 19 Oct 2023
- **Citation:** TCN-2023-NCLT-01103
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/raghupati-construction-private-limited-d3348bd9

## Summary

### Background

The application was filed on 2023-06-13 under Section 7 of the Insolvency and Bankruptcy Code, 2016 by Avargreen Organic Foods Private Limited, the Applicant/Financial Creditor, seeking initiation of the Corporate Insolvency Process (CIRP) against Raghupati Construction Private Limited, the Respondent/Corporate Debtor. The application was made under Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 in Form 1. The Corporate Debtor admitted to the default of non-payment of the outstanding loan amount, which was due and payable on 2022-12-18 and sought 15 days' time from the date of the said letter i.e. till 2023-01-18 to repay the entire outstanding amount. The Corporate Debtor claims that they are completely inclined towards

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## Facts

Avargreen Organic Foods Private Limited (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Raghupati Construction Private Limited (Corporate Debtor). The Financial Creditor granted an unsecured loan of Rs. 1 Crore to the Corporate Debtor with an interest rate of 1.5% per month for a short period of 90 days. The loan was disbursed on 2022-09-20 through NEFT/RTGS. The repayment was agreed to be made on or before 2022-12-18. The Financial Creditor sent a letter dated 2022-12-03 to the Corporate Debtor, intimating about the maturity of the loan facility, repayable on or before 2022-12-18, amounting to Rs. 1,04,50,000/-. Another letter dated 2022-12-26 was

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016, for initiation …

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

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**Reasoning:** The Adjudicating Authority relied on the Supreme Court's judgments in Innoventive

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**Interpretation:** Section 7 provides the mechanism for a financial creditor to trigger the CIRP

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**Application:** In this case, the Financial Creditor, Avargreen Organic Foods Private Limited,

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## Parties

- **Judges:** Praveen…; Ashish…
- **Appellants:** Avargreen Organic…
- **Respondents:** Raghupati…

## Timeline

- **2022-09-20 — Loan Disbur…**: Unsecured loan of Rs. 1 crore was disbursed to…
- **2022-12-03 — Intimation of Loan…**: Applicant sent a letter intimating about the maturity of the loan facility, repayable on…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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