# In the matter of Sova Stores & Spares Private Limited

> NCLT judgment dated 2025-04-29. Citation: TCN-2025-NCLT-00150. 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-00150
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/sova-stores-amp-spares-private-limited-b78841ad

## 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. 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, which were not met. The FC then filed the petition under Section 7 on 09.01.2025.

## 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 between 01-08-2022 and 01-06-2023, which were confirmed by the Corporate Debtor through monthly receipts. The Financial Creditor informed the Corporate Debtor that an outstanding debt of Rs. 1,31,69,380 along with 18% interest was due on 01-01-2024. The Financial Creditor issued multiple letters requesting repayment. The Corporate Debtor requested extensions of time 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

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## Issues and analysis

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

**Ratio:** The Hon'ble Supreme Court in Innoventive Industries Ltd. v. ICICI Bank held that the

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**Reasoning:** The court found that a loan agreement existed between the Financial Creditor and the

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**Interpretation:** Section 7 of the Insolvency and Bankruptcy Code, 2016 allows a financial

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**Application:** In this case, the Corporate Debtor defaulted on its repayment obligations to

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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 Request…**: 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 14(1) — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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