# In the matter of Richfeel Health and Beauty Private Limited C.P.(IB)-1269(MB)-2021

> NCLT judgment dated 2022-08-26. Citation: TCN-2022-NCLT-01242. The case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 26 Aug 2022
- **Citation:** TCN-2022-NCLT-01242
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/richfeel-health-and-beauty-private-limited-cpib-1269mb-2021-3c23a56f

## Summary

### Background

The case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, by four financial creditors against Richfeel Health & Beauty Private Limited, the corporate debtor. The financial creditors, including Rajul Mehta, Sunayana Padwal, Sandhya Singh, and Kedar Mulmule, sought to initiate the Corporate Insolvency Resolution Process (CIRP) due to the corporate debtor's default in repaying a debt of ₹1,17,73,566 along with compound interest at 18% per annum. The corporate debtor had approached the financial creditors for loans to meet working capital requirements, leading to a Loan Agreement dated 18.02.2020, under which the financial

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## Facts

Rajul Mehta, Sunayana Padwal, Sandhya Singh, and Kedar Mulmule, acting as financial creditors, filed an application under Section 7 of the IBC against Richfeel Health & Beauty Private Limited ('Corporate Debtor') due to a default in repaying a loan. The Corporate Debtor had approached the Financial Creditors for loans to meet working capital needs, leading to a Loan Agreement dated 18.02.2020. Under this agreement, the Financial Creditors disbursed ₹41,55,000, ₹34,73,040, ₹34,40,000, and ₹13,34,885 respectively, totaling ₹1,24,02,925. The Corporate Debtor was obligated to repay the loan within 18 months with 18% interest per annum. The Corporate Debtor defaulted on the repayment, leading to an outstanding amount of ₹1,17,73,566 plus interest. The Financial

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## Issues and analysis

### Issue 1: Whether the Financial Creditors have proved the existence of debt and default on the part of the …

**Ratio:** The legal principle applied is that under Section 7 of the IBC, if a financial creditor

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**Reasoning:** The NCLT reasoned that the Financial Creditors had provided sufficient evidence,

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**Interpretation:** Section 7 of the IBC is interpreted to mean that once the financial creditor

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**Application:** In this case, the Financial Creditors provided loan agreements and bank

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## Parties

- **Judges:** P.N. Des…; Shyam Babu…
- **Appellants:** Rajul M…
- **Respondents:** Richfeel Health &…
- **Advocates:** Rubina…; Mrinali P…

## Timeline

- **2020-02-18 — Loan Agreeme…**: Loan Agreement entered into between the…
- **2019-12-26 — First Disbu…**: First disbursement of loan amount by…

## 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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