# In the matter of Shri Balaji Entertainments Private Limited IA-827-MB-2022 in CP (IB) No. 529-MB-2021

> NCLT judgment dated 2022-04-20. Citation: TCN-2022-NCLT-03186. Pegasus Assets Reconstruction Private Limited, the Financial Creditor, filed an application…

- **Court:** NCLT
- **Order date:** 20 Apr 2022
- **Citation:** TCN-2022-NCLT-03186
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/shri-balaji-entertainments-private-limited-ia-827-mb-2022-in-cp-ib-no-529-mb-202-9851acbb

## Summary

### Background

Pegasus Assets Reconstruction Private Limited, the Financial Creditor, filed an application under Section 7 of the Insolvency & Bankruptcy Code, 2016 (I&B Code) against Shri Balaji Entertainments Private Limited, the Corporate Debtor, for initiating Corporate Insolvency Resolution Process (CIRP). The Financial Creditor claimed a total default of Rs.35,90,56,629/-. The Date of Default was 01.06.2019, and the date of NPA classification was 02.12.2019. The petition was filed on 18.05.2021.

## Facts

Pegasus Assets Reconstruction Private Limited filed a petition under Section 7 of the I&B Code against Shri Balaji Entertainments Private Limited for initiating CIRP. The Financial Creditor claimed a default of Rs.35,90,56,629/-, with the date of default being 01.06.2019 and NPA classification on 02.12.2019. The Financial Creditor had sanctioned credit facilities to the Corporate Debtor, including LRD Term Loan and Overdraft Facility. M/s Universal Textile Waterproof Co. India was the Principal Borrower, and the Corporate Debtor was the Co-Borrower and Corporate Guarantor. SVC Co-operative Bank initially sanctioned the loans, which were later assigned to the Financial Creditor. The Corporate Debtor argued that the petition was unwarranted and an abuse of the

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor was defective due to the lack of a board of …

**Ratio:** There is no requirement under Section 7 of the I&B Code for the Financial Creditor to

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**Reasoning:** The Corporate Debtor's contention that a board of directors meeting was necessary was an

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**Interpretation:** Section 7 of the I&B Code outlines the procedure for initiating CIRP by a

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**Application:** The NCLT found no merit in the Corporate Debtor's contention, as the absence of

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## Parties

- **Judges:** RAJESH S…; KISHORE VEMULAPALL…
- **Appellants:** Pegasus Assets…
- **Respondents:** Balaji Entertainme…

## Timeline

- **2019-06-01 — Date of D…**: The date of default as mentioned…
- **2019-12-02 — Date of NPA Classificati…**: The date of classification of the Corporate Debtor as a Non-Performing Asset (NPA) is…

## 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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