# In the matter of Safintra Roofing (India) Limited CP(IB)-198-MB-2023

> NCLT judgment dated 2023-06-23. Citation: TCN-2023-NCLT-02802. The case involves a Company Petition filed by Safal Africa Ltd. (Financial Creditor) under…

- **Court:** NCLT
- **Order date:** 23 Jun 2023
- **Citation:** TCN-2023-NCLT-02802
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/safintra-roofing-india-limited-cpib-198-mb-2023-5949cb1c

## Summary

### Background

The case involves a Company Petition filed by Safal Africa Ltd. (Financial Creditor) under Section 7 of the Insolvency & Bankruptcy Code, 2016 (IBC), seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Safintra Roofing (India) Limited (Corporate Debtor). The Corporate Debtor defaulted on repaying an outstanding amount of ₹2,48,31,000/- since 01.04.2014. The Financial Creditor holds 57.14% shares of the Corporate Debtor and had extended a loan of US$ 300,000.00 to the Corporate Debtor on 01.07.2009. The Corporate Debtor acknowledged the debt and its inability to repay due to unfavorable business conditions. Another shareholder, Octamec Engineering Ltd., holding 42.86% shares, is under liquidation.

## Facts

Safal Africa Ltd. (Financial Creditor) filed a Company Petition under Section 7 of the IBC against Safintra Roofing (India) Limited (Corporate Debtor) seeking to initiate CIRP. The Financial Creditor is incorporated in British Virgin Islands and holds 57.14% shares of the Corporate Debtor. The Corporate Debtor was incorporated under the Companies Act, 1956. The Corporate Debtor defaulted on repaying ₹2,48,31,000/- since 01.04.2014. The Financial Creditor extended a loan of US$ 300,000.00 to the Corporate Debtor on 01.07.2009, which was raised in accordance with FEMA regulations. The loan agreement stipulated repayment starting from 31.07.2012, with the last installment due on 30.04.2013, but a supplementary agreement revised the schedule. The Financial Creditor

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## Issues and analysis

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

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

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**Reasoning:** The NCLT found that the Corporate Debtor had defaulted on a financial debt of more than

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**Interpretation:** Section 7 of the IBC provides a mechanism for financial creditors to recover

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**Application:** The Corporate Debtor's failure to repay the loan amount of ₹2,48,31,000/- since

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## Parties

- **Judges:** KISHORE VEMULAPALL…; Prabhat…
- **Appellants:** Safal Afric…
- **Respondents:** Safintra Roofing…

## Timeline

- **2007-12-21 — Incorporation of…**: Safal Africa Ltd. incorporated…
- **2008-07-30 — Incorporation of…**: Safintra Roofing (India) Limited…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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