# In the matter of Ramya Outsourcing Solutions Private Limited

> NCLT judgment dated 2024-07-26. Citation: TCN-2024-NCLT-00948. 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-00948
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/ramya-outsourcing-solutions-private-limited-9807780b

## 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 claimed that the corporate debtor had defaulted on a financial debt. 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. The applicant company then filed a petition for voluntary revision of the financial statements for the

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## 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 was initially dismissed by the Tribunal on 21.07.2022 because the Financial Creditor's name was not shown under Long Term Borrowings in the Financial Statement for the period 2020 – 2021. The NCLAT allowed an appeal against this decision on 27.07.2023. The Corporate Debtor had approached the Financial Creditor for short-term loans to meet financial commitments. The Applicant agreed to disburse short-term loans at 12% interest. The Applicant disbursed Rs.50,00,000/- in July and August 2019. On 22.03.2021, an MOU was entered into where the Corporate Debtor

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## Issues and analysis

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

**Ratio:** The scheme of the Code ensures that when a default takes place, in the sense that a debt

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**Reasoning:** The Tribunal relied on the Supreme Court's judgment in Innoventive Industries Limited v.

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**Interpretation:** Section 7 of the IBC allows a financial creditor to initiate CIRP against a

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**Application:** The Tribunal found that the Financial Creditor had proved that there was a

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## Parties

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