# In the matter of Rainbow Infrabuild Pvt. Ltd.

> NCLT judgment dated 2023-11-09. Citation: TCN-2023-NCLT-00790. The case pertains to an application filed under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 9 Nov 2023
- **Citation:** TCN-2023-NCLT-00790
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/rainbow-infrabuild-pvt-ltd-4b5003f0

## Summary

### Background

The case pertains to an application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 by AVB Global Ventures Pvt. Ltd. (Financial Creditor) against Rainbow Infrabuild Pvt. Ltd. (Corporate Debtor) for initiation of Corporate Insolvency Resolution Process (CIRP). The application was filed due to the Corporate Debtor's failure to repay outstanding dues of Rs. 2,38,95,357/-, which includes a principal amount of Rs. 1,91,11,250/- and interest of Rs. 47,87,107/-. The date of default was stated as 30.06.2022. The Financial Creditor claimed that the Corporate Debtor had approached them for financial assistance and entered into a Memorandum of Understanding (MoU) dated 25.05.2020, agreeing to repay the loan with interest. The Financial Creditor disbursed the

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## Facts

AVB Global Ventures Pvt. Ltd. (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Rainbow Infrabuild Pvt. Ltd. (Corporate Debtor) for initiation of Corporate Insolvency Resolution Process (CIRP). The Financial Creditor and Corporate Debtor entered into a Memorandum of Understanding (MoU) on 25.05.2020, wherein the Corporate Debtor sought financial assistance of Rs. 2.00 Crores. The Financial Creditor disbursed Rs. 1,91,11,250/- in 8 tranches between 27.05.2020 and 21.07.2020. The Corporate Debtor failed to repay the amount with interest @ 9% p.a. by the agreed date of 30.06.2022, resulting in a default. The Financial Creditor issued a demand notice on 05.01.2023, which was served on the Corporate Debtor on

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## Issues and analysis

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

**Ratio:** Section 7(5) of the I.B. Code, 2016, stipulates that the Adjudicating Authority must be

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**Reasoning:** The Adjudicating Authority considered the documents and evidence provided by the

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**Interpretation:** The Adjudicating Authority interpreted Section 7(5) to mean that it must assess

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**Application:** The Adjudicating Authority found that the application was complete as the

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## Parties

- **Judges:** SHAMMI…; SAMEER…
- **Appellants:** AVB Global…
- **Respondents:** Rainbow Infrabuild…

## Timeline

- **2020-05-25 — Memorandum of…**: The Applicant/Financial Creditor and the Respondent/Corporate Debtor entered into a…
- **2020-05-27 — First Disbu…**: The Applicant/Financial Creditor disbursed the first tranche of the loan amount on…

## 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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