# In the matter of Rukmani Ispat Private Limited

> NCLT judgment dated 2023-09-19. Citation: TCN-2023-NCLT-01539. The case involves a petition filed by Tikmani Steel Trading Company (Financial Creditor)…

- **Court:** NCLT
- **Order date:** 19 Sept 2023
- **Citation:** TCN-2023-NCLT-01539
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/rukmani-ispat-private-limited-6e5f8295

## Summary

### Background

The case involves a petition filed by Tikmani Steel Trading Company (Financial Creditor) against Rukmani Ispat Private Limited (Corporate Debtor) under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP). The Financial Creditor claimed that the Corporate Debtor defaulted on a payment of Rs. 1,49,62,819.67/- as of February 22, 2021, including interest. The Corporate Debtor contested the claim, arguing that the petition was not maintainable and that the amount was not due. The petition was initially dismissed for non-prosecution but was later restored. The Corporate Debtor argued that the amount of Rs. 98 Lakh received from the Financial Creditor was paid to other companies on the Financial

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## Facts

Tikmani Steel Trading Company (Financial Creditor) filed a petition against Rukmani Ispat Private Limited (Corporate Debtor) under Section 7 of the Insolvency and Bankruptcy Code, 2016. The Financial Creditor claimed a default of Rs. 1,49,62,819.67/- as of February 22, 2021, including interest. The Financial Creditor sanctioned and disbursed Rs. 98,00,000/- to the Corporate Debtor on December 7, 2017. The Corporate Debtor argued that it paid Rs. 98 Lakh to Ezone Strips Pvt. Ltd. (Rs. 72,59,755/-) and Ajay Tube Industries Pvt. Ltd. (Rs. 23,40,245/-) on the Financial Creditor's request. The Financial Creditor issued a demand notice on June 17, 2020, claiming an unpaid operational debt. The Corporate Debtor made a payment of Rs. 2,50,000/- which was adjusted against the

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## Issues and analysis

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

**Ratio:** The petition is not maintainable if the debt does not meet the requirements of a

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**Reasoning:** The court found that the demand notice issued by the Financial Creditor referred to an

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**Interpretation:** A petition under Section 7 of the I&B Code can only be initiated for a

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**Application:** In this case, the demand notice referred to an operational debt, while the

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## Parties

- **Judges:** BIDISHA BA…; Balraj…
- **Appellants:** Tikmani Steel…
- **Respondents:** Rukmani Ispat…
- **Advocates:** Sharukh…; S. Mo…; +1 more

## Timeline

- **2017-12-07 — Sanction and Disbursemen…**: Financial Creditor sanctioned and disbursed…
- **2019-02-08 — Repayment by Corporate…**: Corporate Debtor made 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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