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

> NCLT judgment dated 2022-03-14. Citation: TCN-2022-NCLT-03761. M/s Capital Finance and Investments LLP filed an application under Section 7 of the Insolvency…

- **Court:** NCLT
- **Order date:** 14 Mar 2022
- **Citation:** TCN-2022-NCLT-03761
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/shri-krishna-prasadam-limited-ib-227-nd-2021-8c393c53

## Summary

### Background

M/s Capital Finance and Investments LLP filed an application 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 due to an alleged default in settling an amount of Rs. 29,28,210/- as of 04.03.2020. The loan agreement was executed on 05-10-2016 for a term of three years, having a rate of interest of 10% per annum. The Financial Creditor served a demand letter for the repayment of the loan amount of Rs. 21,83,000/- along with three years' interest accrued on the same @ 10 percent per annum amounting to Rs. 6,54,301/-. The total amount due against M/S Shri Krishna Prasadam Limited was Rs. 28,37,301/- as on 04.03.2020. Despite several notices, the Corporate

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## Facts

A loan agreement was executed between Capital Finance and Investments (partnership firm, later converted to LLP) and M/s Shri Krishna Prasadam Limited. An amount of Rs. 21,83,000/- was advanced to M/s Shri Krishna Prasadam Limited at an interest rate of 10% per annum. The Financial Creditor served a demand letter for the repayment of the loan amount of Rs. 21,83,000/- along with three years' interest accrued on the same @ 10 percent per annum amounting to Rs. 6,54,301/-. The total amount due against M/S Shri Krishna Prasadam Limited was Rs. 28,37,301/- as on 04.03.2020. A legal notice was issued for recalling the loan and repayment of the loan amount with interest, amounting to Rs. 29,28,210/-, including a principal loan amount of Rs. 21,83,000/- and a total interest

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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 Insolvency and Bankruptcy Code, 2016 allows a financial creditor to

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

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

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**Application:** The Tribunal applied Section 7 to the facts of the case, finding that the

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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 executed between Financial Creditor and Corporate Debtor for a term of…
- **2019-10-04 — First Demand…**: First demand letter issued when the term of three years got over for the payment of…

## 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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