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

> NCLT judgment dated 2022-12-01. Citation: TCN-2022-NCLT-00273. 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-00273
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/simtel-trading-corporation-limited-cp-ib-34-kob-2022-9d82f823

## Summary

### Background

Tata Capital Financial Services Private Limited filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Simtel Trading Corporation Private Limited. The application was based on the corporate debtor's default in repaying a financial debt. The Financial Creditor sought admission of the application, declaration of moratorium, and appointment of an Interim Resolution Professional (IRP). The Corporate Debtor was set ex-parte as they did not file any application to set aside the ex-parte order.

## 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, which was also sanctioned. The Corporate Debtor defaulted on payments due from 02.02.2018. The Financial Creditor recalled the Channel Facility on 13.02.2019 and demanded Rs.

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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(5) of the IBC, 2016 allows the Adjudicating Authority to admit an application

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**Reasoning:** The Tribunal considered the facts presented by the Financial Creditor, including the loan

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

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**Application:** The Tribunal found that the Financial Creditor had demonstrated a default by

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## Parties

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

## Timeline

- **2015-10-26 — Sanction of Credit…**: Financial Creditor sanctioned a credit facility…
- **2015-11-16 — Channel Finance…**: 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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