# In the matter of S V Distributors Private Limited

> NCLT judgment dated 2024-07-19. Citation: TCN-2024-NCLT-00981. The case involves a petition filed by Billionaire Hospitality Services Pvt. Ltd. (the…

- **Court:** NCLT
- **Order date:** 19 Jul 2024
- **Citation:** TCN-2024-NCLT-00981
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/s-v-distributors-private-limited-d7585712

## Summary

### Background

The case involves a petition filed by Billionaire Hospitality Services Pvt. Ltd. (the Petitioner/Financial Creditor) against SV Distributors Private Limited (the Corporate Debtor/Respondent) under Section 7 of the Insolvency and Bankruptcy Code, 2016, r.w. Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. The Petitioner claims that the Corporate Debtor defaulted on a loan amount of Rs. 2.94 Crores, with the date of default being 08.01.2024. The loan agreement, dated 07.06.2019, stipulated an interest rate of 18% per annum and repayment on demand after a three-day notice. The Petitioner issued a demand letter on 05.01.2024 and a default notice on 06.02.2024, but the Corporate Debtor failed to repay the amount.

## Facts

Billionaire Hospitality Services Pvt. Ltd. (Petitioner/Financial Creditor) filed a petition against SV Distributors Private Limited (Corporate Debtor/Respondent) under Section 7 of the Insolvency and Bankruptcy Code, 2016. The Petitioner claimed a default of Rs. 2.94 Crores, with the default date being 08.01.2024. A loan agreement dated 07.06.2019 existed between the parties, specifying an 18% annual interest rate and repayment on demand after a three-day notice. The Petitioner sent a demand letter on 05.01.2024 and a default notice on 06.02.2024. The Respondent attributed their inability to repay the debt to the Covid-19 pandemic and claimed the petition was a misuse of the IBC. The Respondent did not dispute the debt amount during the proceedings. The Petitioner

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor, SV Distributors Private Limited, defaulted on its debt obligations to …

**Ratio:** Section 7 of the Insolvency and Bankruptcy Code, 2016, allows a financial creditor to

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**Reasoning:** The court observed that the Petitioner presented a loan agreement, demand letter, and

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**Interpretation:** Section 7 of the IBC is interpreted to mean that if a financial creditor can

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**Application:** In this case, the Petitioner provided sufficient evidence of a loan agreement

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## Parties

- **Judges:** Reeta K…; Madhu S…
- **Appellants:** Billionaire…
- **Respondents:** SV Distributors…

## Timeline

- **2019-06-07 — Loan Agreeme…**: Loan Agreement executed between Billionaire Hospitality Services Pvt. Ltd. and SV…
- **2024-01-05 — Demand L…**: Billionaire Hospitality Services Pvt. Ltd. issued a demand letter to SV Distributors…

## 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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