# In the matter of Shivpriya Cables Private Limited

> NCLT judgment dated 2023-12-07. Citation: TCN-2023-NCLT-00381. The case involves a petition filed under Section 7 of the Insolvency and Bankruptcy Code (IBC),…

- **Court:** NCLT
- **Order date:** 7 Dec 2023
- **Citation:** TCN-2023-NCLT-00381
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/shivpriya-cables-private-limited-9a4aa053

## Summary

### Background

The case involves a petition filed under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, by Northern Arc Capital Limited against Shivpriya Cables Private Limited. The matter concerns a default on an unsecured business loan. The initial disbursement agreement was executed on July 30, 2019, for Rs. 1,50,00,000. Subsequent disbursements and a second facility agreement followed. The corporate debtor, Shivpriya Cables Private Limited, partially repaid the loan, with the last payment made on May 28, 2021. The petitioner claims the date of default is January 31, 2023.

## Facts

Northern Arc Capital Limited (Financial Creditor) extended an unsecured business loan to Shivpriya Cables Private Limited (Corporate Debtor). The initial disbursement agreement was executed on July 30, 2019, for Rs. 1,50,00,000. A disbursement request letter was issued by the Corporate Debtor on the same date. Part of the loan amount was received by the Corporate Debtor on July 31, 2019. A subsequent disbursement request letter was issued on August 28, 2019, and the balance amount of Rs. 50 lakhs was disbursed on August 31, 2019. A second facility agreement was entered into on September 25, 2020, for Rs. 28,11,400. The loan amount was disbursed on September 30, 2020. The Corporate Debtor partially repaid the loan, with the last payment made on May 28, 2021. The

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## Issues and analysis

### Issue 1: Whether there was a disbursement of loan and …

**Ratio:** Section 7(5)(a) of the IBC, 2016 requires the Adjudicating Authority to be satisfied that

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**Reasoning:** The Corporate Debtor's counsel conceded to both the disbursement of the loan amount and

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**Interpretation:** The Adjudicating Authority interpreted Section 7(5)(a) of the IBC, 2016 to mean

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**Application:** The ratio and reasoning were applied to the facts of the case, where the

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## Parties

- **Judges:** Sh. Ashok Kumar…; L. N. G…
- **Appellants:** Northern Arc…
- **Respondents:** SHIVPRIYA CABLES…
- **Advocates:** Deepak B…; Varsha Ag…; +1 more

## Timeline

- **2019-07-30 — First Disbursement…**: Execution of the first disbursement agreement between the Corporate Debtor and Financial…
- **2019-07-30 — Disbursement Request…**: Corporate Debtor issued a…

## 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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