# In the matter of Shree Ramrajya Cotex Private Limited CP (IB) 320-NCLT-AHM-2022

> NCLT judgment dated 2023-02-03. Citation: TCN-2023-NCLT-04789. The application was filed on 25.11.2022 under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 3 Feb 2023
- **Citation:** TCN-2023-NCLT-04789
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/shree-ramrajya-cotex-private-limited-cp-ib-320-nclt-ahm-2022-af670588

## Summary

### Background

The application was filed on 25.11.2022 under Section 7 of the Insolvency and Bankruptcy Code, 2016, read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, by Raj Radhe Finance Limited through its Authorised Officer Mr. Meet F. Shah, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against Shree Ramrajya Cotex Private Limited. The applicant, a non-banking finance company (NBFC), claimed that the corporate debtor had defaulted on its financial obligations.

## Facts

Raj Radhe Finance Limited filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Shree Ramrajya Cotex Private Limited. The applicant, Raj Radhe Finance Limited, is a non-banking finance company (NBFC) incorporated on 17.01.1985. Shree Ramrajya Cotex Private Limited, the corporate debtor, is a private limited company incorporated on 27.08.2007. State Bank of India had sanctioned a cash credit limit of Rs. 500.00 lacs and a term loan of Rs. 175.00 lacs to the corporate debtor on 20.02.2008, which were later renewed/extended. The bank filed a suit before DRT, Ahmedabad, claiming Rs. 17.92 crores. Notice under Section 13(2) of the SARFAESI Act, 2002, was issued on 10.11.2016. The

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the …

**Ratio:** Section 7 of the IBC allows a financial creditor to initiate CIRP against a corporate

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**Reasoning:** The court observed that the application was filed by a financial creditor, Raj Radhe

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

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**Application:** The applicant, being a financial creditor by virtue of the assignment

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## Parties

- **Judges:** DEEPTI M…; Ajai Das Me…
- **Appellants:** Raj Radhe Finance…
- **Respondents:** Shree Ramrajya…

## Timeline

- **2008-02-20 — Sanction of Credit…**: State Bank of India sanctioned cash credit…
- **2016-11-10 — SARFAESI…**: Notice under Section 13(2) of the…

## 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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