# In the matter of Rushabh Precision Bearings Limited CP(IB)-70-MB-2022

> NCLT judgment dated 2022-04-25. Citation: TCN-2022-NCLT-03089. Shimnit India Private Limited filed a petition under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 25 Apr 2022
- **Citation:** TCN-2022-NCLT-03089
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/rushabh-precision-bearings-limited-cpib-70-mb-2022-a4d6bf86

## Summary

### Background

Shimnit India Private Limited filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process against Rushabh Precision Bearings Limited. The petition was filed due to a total financial debt of Rs. 22,23,45,748/- as of December 31, 2021, including interest at 18% per annum. The petitioner claimed that the corporate debtor defaulted on the principal loan and interest payments. The corporate debtor argued that there was no default as the loan agreement included a moratorium period, and the petition was prematurely filed.

## Facts

Shimnit India Private Limited ("SIPL") filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Rushabh Precision Bearings Limited ("RPBL"), the Corporate Debtor, seeking to initiate Corporate Insolvency Resolution Process (CIRP). The claim was based on a total financial debt of Rs. 22,23,45,748 as of 31.12.2021, including interest at 18% per annum. The debt comprised a principal loan, an additional loan, and a further loan. A loan agreement dated 28.05.2021 existed between SIPL and RPBL, which included a six-month moratorium period for interest repayment. SIPL claimed RPBL defaulted on the principal loan and interest payments after the moratorium expired on 27.11.2021. RPBL argued that the petition was premature because

…

## Issues and analysis

### Issue 1: Whether there exists a 'financial debt' and a 'default' as defined under Section 5(8) and Section …

**Ratio:** The legal principle is that a 'financial debt' exists when there is a debt along with

…

**Reasoning:** The NCLT reasoned that the loan agreement clearly established a financial debt owed by

…

**Interpretation:** Section 5(8) defines 'financial debt' broadly to include any debt disbursed

…

**Application:** The NCLT applied the definitions of 'financial debt' and 'default' to the

…

## Parties

- **Judges:** SUCHITRA KANUPARTH…; Chandra Bha…; +1 more
- **Appellants:** Shimnit India…
- **Respondents:** Rushabh Precision…

## Timeline

- **2021-01-11 — Disbursement o…**: National Stock Exchange of India A/c RPBL…
- **2021-03-16 — Disbursement o…**: Rushabh Precision Bearings Ltd. received Rs. 3,87,46,714 for repayment of Loan from Kotak…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(8) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/rushabh-precision-bearings-limited-cpib-70-mb-2022-a4d6bf86