# In the matter of Shanti Refrigeration industries Limited

> NCLT judgment dated 2023-09-01. Citation: TCN-2023-NCLT-01788. The case pertains to an application filed by Tata Capital Financial Services Limited (TCFSL),…

- **Court:** NCLT
- **Order date:** 1 Sept 2023
- **Citation:** TCN-2023-NCLT-01788
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/shanti-refrigeration-industries-limited-599cd3e7

## Summary

### Background

The case pertains to an application filed by Tata Capital Financial Services Limited (TCFSL), the Financial Creditor, 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. The application was filed due to the Corporate Debtor's default in repaying loan amounts availed under various financing facilities. The Financial Creditor had granted multiple credit facilities to the Corporate Debtor, including invoice discounting, working capital loans, and channel finance, over several years. The Corporate Debtor repeatedly requested renewals and enhancements of these facilities. Despite these arrangements, the Corporate

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## Facts

Tata Capital Financial Services Limited (TCFSL) extended various financing facilities to M/s Shanti Refrigeration Industries Private Limited, including invoice discounting, working capital loans, and channel finance, starting from 2015. These facilities were periodically renewed and enhanced based on requests from the Corporate Debtor. The Corporate Debtor provided letters of guarantee and executed various agreements, including loan agreements, hypothecation deeds, and undertakings. Despite these arrangements, the Corporate Debtor defaulted on its repayment obligations. As of 10.11.2021, the outstanding amount was Rs. 6,39,72,985. TCFSL issued a recall notice on 27.12.2021. The Corporate Debtor acknowledged its liability in renewal letters dated 17.10.2019, 10.01.2020,

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## Issues and analysis

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

**Ratio:** The principle is that if a debt exists and the debtor has defaulted on its repayment, the

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**Reasoning:** The Corporate Debtor failed to repay the outstanding loan amounts despite repeated

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**Interpretation:** The existence of a debt and default are the primary conditions for admitting an

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**Application:** The Corporate Debtor's failure to repay the loan amounts, coupled with the

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## Parties

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

## Timeline

- **2010-11-19 — Incorporation of Tata Capital Financial…**: Tata Capital Financial Services Limited was…
- **2015-01-27 — Sanction Le…**: Financial creditor granted Sales invoice discounting facility for working capital…

## 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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