# In the matter of Shanti Refrigeration industries Limited

> NCLT judgment dated 2023-09-01. Citation: TCN-2023-NCLT-01804. Tata Capital Financial Services Limited (TCFSL), the financial creditor, filed an application…

- **Court:** NCLT
- **Order date:** 1 Sept 2023
- **Citation:** TCN-2023-NCLT-01804
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/shanti-refrigeration-industries-limited-0192cd24

## Summary

### Background

Tata Capital Financial Services Limited (TCFSL), the financial creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against M/s Shanti Refrigeration Industries Private Limited, the corporate debtor, due to default in repayment of loan facilities. The application was filed based on various loan agreements and sanction letters issued to the corporate debtor. The corporate debtor failed to repay the outstanding amounts, leading to the financial creditor issuing a recall notice.

## Facts

Tata Capital Financial Services Limited (TCFSL) extended various financial facilities to M/s Shanti Refrigeration Industries Private Limited, including invoice discounting, working capital loans, and channel finance. These facilities were governed by multiple sanction letters and agreements executed between 2015 and 2021. The corporate debtor, M/s Shanti Refrigeration Industries Private Limited, defaulted on repayments. TCFSL issued a recall notice on 27.12.2021 demanding repayment of Rs. 6,39,72,985 as of 10.11.2021, along with interest and other charges. The corporate debtor failed to comply with the recall notice. The corporate debtor acknowledged the outstanding debt in various letters and renewal letters. The corporate debtor did not file any reply to the petition

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor under Section 7 of the Insolvency and …

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

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**Reasoning:** The court considered the loan agreements, sanction letters, and the corporate debtor's

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**Interpretation:** Section 7 provides the mechanism for financial creditors to trigger the

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**Application:** The court found that TCFSL, being a financial creditor, had the right to file

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## Parties

- **Judges:** Praveen…; Ashish…
- **Appellants:** Tata Capital…
- **Respondents:** M/S SHANTI…
- **Advocates:** Sh. Nishant…

## Timeline

- **2015-01-27 — Sanction Le…**: Master Invoice Discounting…
- **2015-12-16 — Sanction Le…**: Invoice Discounting and…

## 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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