# In the matter of Simtel Trading Corporation Limited CP (IB)-34-KOB-2022

> NCLT judgment dated 2022-12-01. Citation: TCN-2022-NCLT-00278. Tata Capital Financial Services Private Limited filed an application under Section 7 of the…

- **Court:** NCLT
- **Order date:** 1 Dec 2022
- **Citation:** TCN-2022-NCLT-00278
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/simtel-trading-corporation-limited-cp-ib-34-kob-2022-12357225

## Summary

### Background

Tata Capital Financial Services Private Limited filed an application 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, to initiate the Corporate Insolvency Resolution Process (CIRP) against Simtel Trading Corporation Private Limited. The Financial Creditor claimed that the Corporate Debtor defaulted on payments due as of 02.02.2018, leading to the initiation of arbitration proceedings and an arbitral award in favor of the Financial Creditor.

## Facts

Tata Capital Financial Services Private Limited (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Simtel Trading Corporation Private Limited (Corporate Debtor). The Corporate Debtor had approached the Financial Creditor for a credit facility of Rs. 5 Crores, which was sanctioned on 26.10.2015. A Channel Finance Agreement was executed on 16.11.2015, and the Financial Creditor disbursed the amount. Subsequently, the Corporate Debtor requested an additional loan of Rs. 35 Crores. The Corporate Debtor defaulted on payments due as of 02.02.2018. The Financial Creditor recalled the Channel Facility and initiated arbitration proceedings, resulting in an

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor under Section 7 of the Insolvency and …

**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 submissions made 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 found that the Financial Creditor had demonstrated the existence

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## Parties

- **Judges:** P. Moha…; Satya Ranjan…
- **Appellants:** Tata Capital…
- **Respondents:** Simtel Trading…
- **Advocates:** Joseph Kodi…

## Timeline

- **2015-10-26 — Sanction of Credit…**: Financial Creditor sanctioned a credit facility…
- **2015-11-16 — Execution of Channel…**: Channel Finance Agreement executed between the Financial Creditor and the Corporate…

## 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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