# In the matter of Sova Stores & Spares Private Limited

> NCLT judgment dated 2025-04-29. Citation: TCN-2025-NCLT-00151. M/s. Bisco Metal & Power Private Limited, the Financial Creditor (FC), filed an application…

- **Court:** NCLT
- **Order date:** 29 Apr 2025
- **Citation:** TCN-2025-NCLT-00151
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/sova-stores-amp-spares-private-limited-422378a5

## Summary

### Background

M/s. Bisco Metal & Power Private Limited, the Financial Creditor (FC), filed an application under Section 7(1) of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s. Sova Stores & Spares Private Limited, the Corporate Debtor (CD). The CD had approached the FC for a business loan of Rs. 3.50 Crore, and a loan agreement was entered into on 01.07.2022 with an interest rate of 18% p.a. The FC disbursed Rs. 3,41,50,000/- on various dates. The CD failed to repay the loan amount within the stipulated time, leading to the FC issuing demand notices. The CD requested extensions of time to repay the loan, but ultimately defaulted.

## Facts

M/s. Bisco Metal & Power Private Limited (Financial Creditor) sanctioned an unsecured loan of Rs. 3.50 crore to M/s. Sova Stores & Spares Private Limited (Corporate Debtor). The Financial Creditor disbursed Rs. 3,41,50,000/- on various dates, confirmed by monthly receipts issued by the Corporate Debtor. The Financial Creditor informed the Corporate Debtor that an outstanding debt of Rs. 1,31,69,380/- along with interest @18% p.a. had fallen due on 01-01-2024. The Corporate Debtor requested extensions of time to repay the loan on 10.05.2024 and 10.08.2024. The Financial Creditor issued a demand notice on 10.12.2024. The Corporate Debtor repaid Rs. 2,09,80,620/- out of Rs. 3,41,50,000/-. The Financial Creditor filed a petition under Section 7 of the Insolvency

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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:** The legal principle is that if a debt is due and a default has occurred, the application

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**Reasoning:** The court reasoned that the Corporate Debtor had taken a loan from the Financial

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**Interpretation:** The interpretation of Section 7 of the Insolvency and Bankruptcy Code, 2016, is

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**Application:** The court applied the ratio and reasoning to the specific facts of the case,

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## Parties

- **Judges:** BIDISHA BA…; Cmde Siddharth…
- **Appellants:** M/s. Bisco Metal…
- **Respondents:** M/s. Sova Stores…

## Timeline

- **2022-06-06 — CD approaches FC for…**: The Corporate Debtor approached the Financial Creditor for a business loan of Rs. 3.50…
- **2022-07-01 — Loan Agre…**: The Financial Creditor and Corporate Debtor entered into a loan agreement for Rs. 3.50…

## 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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