# In the matter of Shree Bhagirathi Agro Private Limited CP(IB) No.1064-KB-2019

> NCLT judgment dated 2022-07-06. Citation: TCN-2022-NCLT-01862. H.B. Traders Private Limited, the Financial Creditor, filed a petition under Section 7(1) of…

- **Court:** NCLT
- **Order date:** 6 Jul 2022
- **Citation:** TCN-2022-NCLT-01862
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/shree-bhagirathi-agro-private-limited-cpib-no1064-kb-2019-9310ed16

## Summary

### Background

H.B. Traders Private Limited, the Financial Creditor, filed a petition under Section 7(1) of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Shree Bhagirathi Agro Private Limited, the Corporate Debtor. The Financial Creditor claimed that the Corporate Debtor had approached them for financial assistance of Rs. 20,00,000/- in April 2018, agreeing to pay interest at 15% per annum for a period of 120 days. The Financial Creditor disbursed the amount on April 23, 2018. Upon expiry of the 120-day period, the Corporate Debtor defaulted on the principal amount. A cheque of Rs. 96,000/- was issued towards interest payment, which was honored. However, the Corporate Debtor defaulted on both principal and

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## Facts

H.B. Traders Private Limited (Financial Creditor) provided a loan of Rs. 20,00,000/- to Shree Bhagirathi Agro Private Limited (Corporate Debtor) in April 2018. The agreed interest rate was 15% per annum for 120 days. The Corporate Debtor defaulted on the principal amount after the 120-day period. A cheque of Rs. 96,000/- was issued by the Corporate Debtor towards interest payment, which was honored on September 6, 2018. The Corporate Debtor subsequently defaulted on both principal and interest payments. As of April 30, 2019, the total amount due was Rs. 21,98,908/-. A demand notice was issued on April 30, 2019, but no payment was made. The Corporate Debtor acknowledged the debt through an acknowledgment receipt dated April 23, 2018, and a subsequent settlement

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## Issues and analysis

### Issue 1: Whether the petition filed by the Financial Creditor is maintainable under Section 7 of the …

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

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**Reasoning:** The court found that the Financial Creditor had provided sufficient evidence to

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**Interpretation:** Section 7 provides a mechanism for financial creditors to recover their dues

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**Application:** The court applied Section 7 to the facts of the case and determined that the

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## Parties

- **Judges:** RohitKa…; Harish Chander…
- **Appellants:** H.B. Traders…
- **Respondents:** SHREE BHAGIRATHI…
- **Advocates:** Noelle Ba…; Dipak…; +3 more

## Timeline

- **2018-04-01 — Corporate Debtor…**: Corporate Debtor approached Financial Creditor seeking financial assistance of Rs.…
- **2018-04-23 — Financial Creditor Paid…**: Financial Creditor paid Rs. 20,00,000/-…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7(1) — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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