# In the matter of Sahaj Fashions Limited CP No. (IB)- 52-7-JPR-2021

> NCLT judgment dated 2022-11-04. Citation: TCN-2022-NCLT-00520. The application was filed by Bhupendra J. Shah, the Financial Creditor, under Section 7 of the…

- **Court:** NCLT
- **Order date:** 4 Nov 2022
- **Citation:** TCN-2022-NCLT-00520
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/sahaj-fashions-limited-cp-no-ib-52-7-jpr-2021-99bb39ef

## Summary

### Background

The application was filed by Bhupendra J. Shah, the Financial Creditor, under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate a Corporate Insolvency Resolution Process (CIRP) against Sahaj Fashions Limited, the Corporate Debtor. The Financial Creditor had given an unsecured loan of Rs. 25,00,000/- to the Corporate Debtor on 06.04.2017, with a mutually agreed interest rate of 1.5% per month. The Corporate Debtor paid Rs. 9,37,500/- as interest until April 2019. The Financial Creditor requested the Corporate Debtor to pay Rs. 31,75,000/- outstanding as of 31.10.2020, but the Corporate Debtor failed to repay. The Financial Creditor sent a demand notice on 10.12.2020, which was not replied to or paid.

## Facts

Mr. Bhupendra J. Shah, the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Sahaj Fashions Limited, the Corporate Debtor. The Financial Creditor extended an unsecured loan of Rs. 25,00,000/- to the Corporate Debtor on April 6, 2017, with a mutually agreed interest rate of 1.5% per month. The Corporate Debtor made interest payments totaling Rs. 9,37,500/- until April 2019. As of October 31, 2020, the outstanding amount, including principal and interest, was Rs. 31,75,000/-. The Corporate Debtor failed to repay this amount, leading the Financial Creditor to issue a demand notice on December 10, 2020, which went unanswered and unpaid. The Corporate

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## Issues and analysis

### Issue 1: Whether the present insolvency application is maintainable in terms of Section 4 of the Code given …

**Ratio:** The minimum threshold limit for initiating CIRP under Section 4 of the IBC, as amended by

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**Reasoning:** The Adjudicating Authority observed that the claimed default amount of Rs. 25,37,500/-

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**Interpretation:** Section 4 of the IBC, as amended by the notification dated 24.03.2020, sets the

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**Application:** In this case, the claimed default amount was Rs. 25,37,500/-, which is less

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## Parties

- **Judges:** Deep Chandr…; Prasanta Kumar…
- **Appellants:** Bhupendra J…
- **Respondents:** Sahaj Fashions…

## Timeline

- **2017-04-06 — Loan Disb…**: Financial Creditor gave an unsecured loan of…
- **2019-04-01 — Interest Payment Till…**: Corporate Debtor paid Rs.…

## 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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