# In the matter of Ramakrishna Housing Private Limited CP (IB) No. 08-7-AMR-2020

> NCLT judgment dated 2022-10-28. Citation: TCN-2022-NCLT-00603. Shriram City Union Finance Limited filed a petition under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 28 Oct 2022
- **Citation:** TCN-2022-NCLT-00603
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/ramakrishna-housing-private-limited-cp-ib-no-08-7-amr-2020-12968196

## Summary

### Background

Shriram City Union Finance Limited filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Ramakrishna Housing Private Limited, seeking to initiate Corporate Insolvency Resolution Process (CIRP). The corporate debtor (CD) had taken a loan of Rs. 20 Crores from the financial creditor (FC) for working capital and allied business activities, offering collateral security of property and depositing title deeds. The CD entered into two loan agreements with the FC. The guarantors guaranteed the due performance of the obligations. The loan was repayable in monthly installments. The CD defaulted after paying the first 20 installments, with the 21st installment falling due on 2019-06-10. The FC issued a notice terminating the agreement, but the CD

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## Facts

Shriram City Union Finance Limited (Financial Creditor - FC) filed a petition against Ramakrishna Housing Private Limited (Corporate Debtor - CD) under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP). The CD had taken a loan of Rs. 20 Crores from the FC for working capital, offering collateral security. The loan was to be repaid in monthly installments. The CD defaulted after paying 20 installments, with the 21st installment due on 2019-06-10. The FC issued a notice terminating the agreement, but the CD failed to clear the arrears, with an outstanding amount of Rs. 18,71,63,369/-. The CD contended that the FC suppressed material facts, there was non-joinder of parties, and arbitration proceedings

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## Issues and analysis

### Issue 1: Whether the pendency of arbitration proceedings bars the admission of the company petition under …

**Ratio:** The right of the Financial Creditor to move the tribunal under Section 7 of the IBC is

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**Reasoning:** The NCLT relied on judgments of the Supreme Court and High Court, which held that

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**Interpretation:** The pendency of arbitration proceedings does not bar the admission of a company

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**Application:** The NCLT held that the pendency of arbitration proceedings did not prevent the

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## Parties

- **Judges:** TELAPROLU…
- **Appellants:** Shriram City…
- **Respondents:** Ramakrishna…

## Timeline

- **2019-06-10 — Default on Loan…**: The Corporate Debtor defaulted…
- **2022-10-28 — Order Da…**: The NCLT admitted the CP(IB) No.8/7/AMR/2020 and initiated the Corporate Insolvency…

## 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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