# In the matter of Reliable Finance Corpn Pvt. Ltd. IB-654-(ND)-2021

> NCLT judgment dated 2022-07-04. Citation: TCN-2022-NCLT-01890. The case involves an application filed by M/s Sital Leasing Finance Limited, the financial…

- **Court:** NCLT
- **Order date:** 4 Jul 2022
- **Citation:** TCN-2022-NCLT-01890
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/reliable-finance-corpn-pvt-ltd-ib-654-nd-2021-ebbf34e4

## Summary

### Background

The case involves an application filed by M/s Sital Leasing Finance Limited, the financial creditor, under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s Reliable Finance Corpn Pvt. Ltd., the corporate debtor, due to a default in payment of a loan. The financial creditor claims that the corporate debtor defaulted on a loan amount of Rs. 1,32,91,986. The corporate debtor, in its reply, contended that the filing of the petition was an abuse of the process of law and that they were making arrangements to make payments. The corporate debtor also claimed to have already repaid a significant portion of the loan.

## Facts

M/s Sital Leasing Finance Limited (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s Reliable Finance Corpn Pvt. Ltd. (Corporate Debtor). The Financial Creditor claimed that the Corporate Debtor defaulted on a loan amount of Rs. 1,32,91,986. The Corporate Debtor had approached the Financial Creditor for a loan of INR 20,00,00,000 at an interest rate of 18% per annum. The loan agreement was entered on 2018-04-26. The last payment received from the Corporate Debtor was on 2021-03-20. The Corporate Debtor, in its reply, stated that the petition was an abuse of the process of law and that they were making arrangements to make payments. They also

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## Issues and analysis

### Issue 1: Whether the applicant has established a financial debt and default on the part of the corporate …

**Ratio:** Section 7 of the Insolvency and Bankruptcy Code, 2016, requires the applicant to

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**Reasoning:** The Tribunal considered the loan agreements executed between the Financial Creditor and

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**Interpretation:** Section 7 of the IBC is interpreted to mean that if a financial creditor can

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**Application:** In this case, the Financial Creditor provided loan agreements and demonstrated

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## Parties

- **Judges:** SHRI. P.S.N.…; SHRI. RAHUL…
- **Appellants:** M/s Sital Leasing…
- **Respondents:** M/s Reliable…

## Timeline

- **2018-04-26 — Loan Agre…**: The Applicant sanctioned the loan and entered into a loan agreement with the Corporate…
- **2021-03-20 — Last Payment…**: The last payment received from the…

## 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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