# In the matter of Shri Krishna Prasadam Limited IB-227-(ND)-2021

> NCLT judgment dated 2022-03-14. Citation: TCN-2022-NCLT-03755. The case involves an application filed by M/s Capital Finance and Investments LLP under Section…

- **Court:** NCLT
- **Order date:** 14 Mar 2022
- **Citation:** TCN-2022-NCLT-03755
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/shri-krishna-prasadam-limited-ib-227-nd-2021-6d344635

## Summary

### Background

The case involves an application filed by M/s Capital Finance and Investments LLP under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s Shri Krishna Prasadam Limited. The application is based on the alleged default by the Respondent in settling an amount of Rs. 29,28,210/- as of 04.03.2020. A loan agreement was executed between Capital Finance and Investments (initially a partnership firm, later converted to an LLP) and Shri Krishna Prasadam Limited, with an advanced amount of Rs. 21,83,000/- at an interest rate of 10% per annum. The Financial Creditor served a demand letter for repayment, including accrued interest. The Corporate Debtor failed to maintain financial discipline and

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## Facts

A loan agreement was executed between Capital Finance and Investments (a partnership firm later converted to an LLP) and Shri Krishna Prasadam Limited. The total advanced amount was Rs. 21,83,000/- at an interest rate of 10% per annum. The Financial Creditor served a demand letter for the repayment of Rs. 21,83,000/- along with three years' interest accrued at 10% per annum, amounting to Rs. 6,54,301/-, making the total due Rs. 28,37,301/- as of 04.03.2020. A legal notice was issued for recalling the loan and repayment of the loan amount, which amounted to Rs. 29,28,210/-, including a principal loan amount of Rs. 21,83,000/- and total interest of Rs. 7,45,210/- at 10% per annum as of 04.03.2020. The Corporate Debtor did not maintain financial discipline and committed

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 is maintainable …

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

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**Reasoning:** The Tribunal considered the documents filed by the Financial Creditor and the arguments

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

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**Application:** The Tribunal found that the Financial Creditor had provided sufficient evidence

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## Parties

- **Judges:** SHRI. P.S.N.…; SHRI. RAHUL…
- **Appellants:** M/S CAPITAL…
- **Respondents:** M/s Shri Krishna…

## Timeline

- **2016-10-05 — Loan Agre…**: Loan agreement took place between Financial Creditor and Corporate Debtor for a term of…
- **2019-10-04 — First Demand…**: First demand letter was issued when the term of three years got over by the Financial…

## 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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