# In the matter of Ramya Outsourcing Solutions Private Limited

> NCLT judgment dated 2024-07-26. Citation: TCN-2024-NCLT-00943. The case involves an application filed by Mr. J. Mohan Babu, Proprietor of M/S. Annai Audit…

- **Court:** NCLT
- **Order date:** 26 Jul 2024
- **Citation:** TCN-2024-NCLT-00943
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/ramya-outsourcing-solutions-private-limited-12bff93a

## Summary

### Background

The case involves an application filed by Mr. J. Mohan Babu, Proprietor of M/S. Annai Audit Firm, under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Ramya Outsourcing Solutions Private Limited, seeking to initiate the Corporate Insolvency Resolution Process (CIRP). The applicant, claiming to be a financial creditor, sought to recover outstanding dues from the corporate debtor. The Tribunal initially dismissed the application, citing that the financial creditor's name was not shown under Long Term Borrowings in the Financial Statement for the period 2020-2021. However, the NCLAT allowed an appeal against this decision, remanding the matter back to the Adjudicating Authority.

## Facts

Mr. J. Mohan Babu, Proprietor of M/S. Annai Audit Firm, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Ramya Outsourcing Solutions Private Limited. The application aimed to initiate the Corporate Insolvency Resolution Process (CIRP) due to unpaid financial debt. The Tribunal initially dismissed the application because the financial creditor's name was not listed under Long Term Borrowings in the Financial Statement for 2020-2021. The NCLAT overturned this decision and remanded the case. The Corporate Debtor had approached the Financial Creditor for short-term loans to meet financial commitments. The Applicant disbursed Rs.50,00,000 in July and August 2019. On 22.03.2021, an MOU was entered, acknowledging old dues of

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor committed a …

**Ratio:** The ratio is based on Section 3(12) of the Insolvency and Bankruptcy Code, 2016, which

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**Reasoning:** The court reasoned that the Corporate Debtor acknowledged the debt amount in a one-page

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**Interpretation:** The interpretation is that a 'default' occurs when a debt is not paid when it

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**Application:** The ratio and reasoning apply to the specific facts because the Corporate

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## Parties

- **Judges:** SANJIV…; Venkataraman…
- **Appellants:** J Mohan…
- **Respondents:** Ramya Outsourcing…

## Timeline

- **2021-08-14 — Application…**: Mr. J. Mohan Babu filed an application under Section 7 of the IBC against Ramya…
- **2022-07-21 — Application D…**: The Tribunal dismissed the application, citing that the financial creditor's name was not…

## 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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