# In the matter of RKDS Exports Private Limited

> NCLT judgment dated 2023-11-10. Citation: TCN-2023-NCLT-00742. Aditya Birla Finance Limited, the Financial Creditor, filed an application under Section 7 of…

- **Court:** NCLT
- **Order date:** 10 Nov 2023
- **Citation:** TCN-2023-NCLT-00742
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/rkds-exports-private-limited-ae739c94

## Summary

### Background

Aditya Birla Finance Limited, the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against RKDS Exports Private Limited, the Corporate Debtor. The Financial Creditor had extended financial accommodation to M/s. Maa Durga Hardware Stores (borrower) and RKDS Exports Pvt. Ltd. (co-borrower). The Corporate Debtor joined as a co-borrower to avail loan facilities. The Corporate Debtor defaulted on its equated monthly installments, leading to the account being declared as Non-Performing Asset (NPA) on 04/07/2022. The Financial Creditor issued a notice under Section 13(2) of the SARFAESI Act, 2002, calling upon the borrowers to repay the outstanding amount.

## Facts

Aditya Birla 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 RKDS Exports Private Limited (Corporate Debtor). The Corporate Debtor was incorporated on 04/12/2007 with a nominal share capital of Rs. 50 Lakh and a paid-up share capital of Rs. 50 Lakh. The amount of default claimed by the Financial Creditor is Rs. 16,41,19,344.78/-, with the date of default being August 09, 2022. The total debt granted to the Corporate Debtor was Rs. 17,08,41,279/-, disbursed on various dates between October 04, 2017, and January 28, 2022. The Financial Creditor had initially sanctioned a loan of Rs. 3 Crore to M/s. Maa Durga Hardware Stores (borrower),

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor under Section 7 of the Insolvency and …

**Ratio:** The legal principle is that an application under Section 7 of the IBC can be admitted if

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**Reasoning:** The court reasoned that the application was complete, with all necessary documents and

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**Interpretation:** This issue involves interpreting Section 7 of the IBC, which outlines the

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**Application:** The court applied this principle to the facts by examining the loan agreements,

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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…
- **2019-02-04 — Corporate Debtor Joins…**: Corporate Debtor joined as a co-borrower to avail loan facilities from the Financial…

## 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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