# In the matter of Royal Infrasoft Private Limited

> NCLT judgment dated 2023-11-10. Citation: TCN-2023-NCLT-00770. SREI Equipment Finance Limited filed a petition under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 10 Nov 2023
- **Citation:** TCN-2023-NCLT-00770
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/royal-infrasoft-private-limited-12190d07

## Summary

### Background

SREI Equipment Finance Limited filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Royal Infrasoft Private Limited, the Corporate Debtor, due to a default in payment of financial debt. The Financial Creditor and the Corporate Debtor had entered into a loan agreement on March 30, 2019, where a loan facility of Rs. 120 crore was sanctioned. The Financial Creditor disbursed Rs. 116 crore in different tranches. The Corporate Debtor defaulted on interest payments, leading to the Financial Creditor recalling the loan agreement and demanding repayment of Rs. 73,27,80,768. The Corporate Debtor argued that no sum was due, claiming adjustments for amounts derived by SIFL, a sister

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## Facts

On March 30, 2019, SREI Equipment Finance Limited (Financial Creditor) and Royal Infrasoft Private Limited (Corporate Debtor) entered into a loan agreement for a loan facility of Rs. 120 crore. The Financial Creditor disbursed Rs. 116 crore in tranches on May 6, 2019, and May 16, 2019. The Corporate Debtor requested foreclosure of the loan facility on June 14, 2021, offering Rs. 67.75 crore from the sale of mortgaged property. The Financial Creditor refused but agreed to release the property upon receipt of the entire sale consideration. The Corporate Debtor paid Rs. 64,51,45,950 from the sale of the mortgaged property, with Rs. 62,93,82,693 adjusted against the principal and Rs. 1,57,63,257 towards interest. The Financial Creditor issued a NOC on July 12, 2021, for

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor defaulted …

**Ratio:** The fundamental principle is that if a debt exists and the debtor has defaulted in

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**Reasoning:** The NCLT found that the Corporate Debtor admitted to the loan disbursement and subsequent

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

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**Application:** The NCLT applied the principle to the facts, noting the Corporate Debtor's

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## Parties

- **Judges:** RohitKa…; Balraj…
- **Appellants:** SREI Equipment…
- **Respondents:** Royal Infrasoft…
- **Advocates:** Jishnu…; Ramya Har…; +4 more

## Timeline

- **2019-03-30 — Loan Agre…**: SREI Equipment Finance Limited and Royal Infrasoft Private Limited entered into a loan…
- **2019-05-06 — Loan Disbur…**: Financial Creditor disbursed a…

## 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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