# In the matter of RKDS Exports Private Limited

> NCLT judgment dated 2023-11-10. Citation: TCN-2023-NCLT-00773. Aditya Birla Finance Limited filed an application under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 10 Nov 2023
- **Citation:** TCN-2023-NCLT-00773
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/rkds-exports-private-limited-55d689d2

## Summary

### Background

Aditya Birla Finance Limited filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against RKDS Exports Private Limited, seeking initiation of the Corporate Insolvency Resolution Process (CIRP). The application was based on the corporate debtor's failure to repay a debt of Rs. 16,41,19,344.78/-. The financial creditor had extended loan facilities to Maa Durga Hardware Stores, with RKDS Exports Pvt. Ltd. acting as a co-borrower. The account was declared as Non-Performing Asset (NPA) on 04/07/2022.

## Facts

Aditya Birla Finance Limited (Financial Creditor) extended financial accommodation to M/s. Maa Durga Hardware Stores (borrower) and RKDS Exports Pvt. Ltd. (co-borrower). Initially, a loan of Rs. 3 Crore was sanctioned, later enhanced to Rs. 5 Crore. A Demand Loan Agreement dated 18/09/2017 for Rs. 2 Crore was executed. Another loan agreement dated 18/09/2017 enhanced the credit facilities to Rs. 6 Crore, with a fresh term loan facility of Rs. 5 Crore. RKDS Exports Private Limited joined as a co-borrower on 04/02/2019, with an addendum loan agreement dated 21/02/2019 for Rs. 2.46 Crore. A loan agreement dated 27/01/2022 was executed for a further Term Loan Facility of Rs. 1 Crore. The Financial Creditor extended a moratorium period due to the COVID-19 pandemic from

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## Issues and analysis

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

**Ratio:** The application is complete in all respects and meets the requirements for admitting a

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**Reasoning:** The court found that all the necessary ingredients for admitting a Section 7 petition

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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 court applied the ratio to the facts of the case and found that the

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## Parties

- **Judges:** BIDISHA BA…; ARVIND DEVA…
- **Appellants:** ADITYA BIRLA…
- **Respondents:** RKDS Exports…

## Timeline

- **2007-12-04 — Incorporation of…**: RKDS Exports Private Limited…
- **2017-09-18 — Demand Loan A…**: Demand Loan Agreement executed for…

## 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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