# In the matter of Shivani Flexipack Limited

> NCLT judgment dated 2023-11-28. Citation: TCN-2023-NCLT-00551. The case involves a petition filed by Intec Capital Limited (Financial Creditor) under Section…

- **Court:** NCLT
- **Order date:** 28 Nov 2023
- **Citation:** TCN-2023-NCLT-00551
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/shivani-flexipack-limited-f3356368

## Summary

### Background

The case involves a petition filed by Intec Capital Limited (Financial Creditor) under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s Shivani Flexipack Limited (Corporate Debtor) due to default in repayment of a loan. The Corporate Debtor had approached the Financial Creditor for a loan facility to purchase machinery, which was sanctioned via a Sanction Letter dated 2011-11-18. A Loan Agreement was executed on 2012-01-18. The Financial Creditor claims that the Corporate Debtor defaulted on the loan repayment, leading to an arbitration award in favor of the Financial Creditor on 2018-02-21. The Financial Creditor filed the petition on 2022-05-13, stating the date of default as 2018-02-21,

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## Facts

Intec Capital Limited (Financial Creditor) filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s Shivani Flexipack Limited (Corporate Debtor) due to default in loan repayment. The Corporate Debtor approached the Financial Creditor for a loan facility to purchase machinery. The Financial Creditor sanctioned a loan of Rs. 1,66,40,134/- vide Sanction Letter dated 2011-11-18. A Loan Agreement was executed on 2012-01-18. As per the loan agreement, the Corporate Debtor offered collateral money of Rs. 49,92,040/-, personal guarantee of Mr. Shankar Namdev Kashid, and a first and exclusive charge on lamination machines. The loan was repayable in 60 monthly installments. The Financial

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor defaulted in repayment …

**Ratio:** The principle is that if a corporate debtor defaults on a financial debt, the

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**Reasoning:** The NCLT considered the loan agreement, the arbitration award, and the Corporate Debtor's

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**Interpretation:** The term 'default' under the IBC refers to the non-payment of debt when it has

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**Application:** The NCLT found that the Corporate Debtor had defaulted on the loan repayment

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## Parties

- **Judges:** Charanjeet Singh…; Smt Lakshmi…
- **Appellants:** Intec Capital…
- **Respondents:** Shivani Flexipack…; M/s. Shivani…
- **Advocates:** Vidit Divya…; Rohit G…; +1 more

## Timeline

- **2011-11-18 — Sanction…**: Financial Creditor sanctioned the loan…
- **2012-01-18 — Loan Agre…**: Loan Agreement executed between the…

## 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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