# In the matter of Sahaj Fashions Limited CP No. (IB)- 55-7-JPR-2021

> NCLT judgment dated 2022-11-04. Citation: TCN-2022-NCLT-00533. Rupal Bhupendra Shah, the financial creditor/applicant, filed an application under Section 7 of…

- **Court:** NCLT
- **Order date:** 4 Nov 2022
- **Citation:** TCN-2022-NCLT-00533
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/sahaj-fashions-limited-cp-no-ib-55-7-jpr-2021-69a8bc24

## Summary

### Background

Rupal Bhupendra Shah, the financial creditor/applicant, filed an application 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/respondent. The application was filed on 13.08.2021. The corporate debtor raised an objection regarding the maintainability of the petition, arguing that the application did not meet the minimum threshold limit as prescribed under the IBC for the initiation of CIRP. The corporate debtor contended that as per the notification dated 24.03.2020, the minimum threshold limit under Section 4 of IBC had been fixed at Rs. 1,00,00,000/- (Rupees One Crore) for the initiation of CIRP, while the applicant claimed a defaulted

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## Facts

Rupal Bhupendra Shah (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 (Corporate Debtor) on 13.08.2021. The Financial Creditor had given an unsecured loan of Rs. 12,00,000/- to the Corporate Debtor on 17.04.2017, with a mutually agreed interest rate of 1.5% per month. The Corporate Debtor paid Rs. 4,87,500/- as interest until April 2019. The Financial Creditor requested payment of Rs. 16,51,000/- (including principal and interest) via email on 09.11.2020, but the Corporate Debtor failed to pay. A demand notice was sent on 10.12.2020 for Rs. 16,70,500/-, but the Corporate Debtor neither replied nor paid. The Corporate Debtor

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## Issues and analysis

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

**Ratio:** The ratio is that the threshold limit for initiating CIRP under Section 4 of the IBC is

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**Reasoning:** The court reasoned that the notification dated 24.03.2020, issued by the Ministry of

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**Interpretation:** Section 4 of the IBC, as interpreted by the notification dated 24.03.2020 and

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**Application:** In this case, the application was filed on 13.08.2021, after the notification

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## Parties

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

## Timeline

- **2017-04-17 — Unsecured…**: Financial Creditor gave an unsecured loan of Rs. 12,00,000/- to the Corporate Debtor at…
- **2019-04-01 — Interest P…**: 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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