# In the matter of Star Line Leasing Limited

> NCLT judgment dated 2023-11-23. Citation: TCN-2023-NCLT-00590. The case involves an application filed by Zep Infratech Limited, the Financial Creditor,…

- **Court:** NCLT
- **Order date:** 23 Nov 2023
- **Citation:** TCN-2023-NCLT-00590
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/star-line-leasing-limited-9f35c211

## Summary

### Background

The case involves an application filed by Zep Infratech Limited, the Financial Creditor, against Star Line Leasing Limited, the Corporate Debtor, under Section 7 of the Insolvency and Bankruptcy Code, 2016. The Financial Creditor seeks to initiate the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor and appoint an Interim Resolution Professional (IRP). The Financial Creditor had granted a loan of Rs. 7,00,00,000 to the Corporate Debtor on 19.05.2017, which was sanctioned and disbursed by Sintex Power Limited (later changed to Sixvents Power and Engineering Limited). Sixvents Power and Engineering Limited was subsequently amalgamated with the Financial Creditor. A Memorandum of Understanding (MOU) cum Loan Agreement was entered into, wherein

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## Facts

Zep Infratech Limited (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Star Line Leasing Limited (Corporate Debtor) to initiate CIRP. The Financial Creditor had granted a loan of Rs. 7,00,00,000 to the Corporate Debtor on 19.05.2017, disbursed by Sintex Power Limited (later Sixvents Power and Engineering Limited), which was then amalgamated with the Financial Creditor. A Memorandum of Understanding (MOU) cum Loan Agreement was executed, requiring repayment with a 20% premium by 30.06.2022. The Corporate Debtor defaulted on the repayment. The Financial Creditor issued a legal notice on 11.09.2023, which the Corporate Debtor acknowledged on 23.09.2023, admitting the debt but citing financial difficulties. The

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## Issues and analysis

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

**Ratio:** Section 7 of the Insolvency and Bankruptcy Code, 2016, allows a financial creditor to

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**Reasoning:** The Adjudicating Authority noted that the Financial Creditor had proved the existence of

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**Interpretation:** Section 7 provides a mechanism for financial creditors to recover their dues by

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**Application:** In this case, the Financial Creditor, Zep Infratech Limited, proved that it had

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## Parties

- **Judges:** SHAMMI…; SAMEER…
- **Appellants:** Zep Infrate…
- **Respondents:** Star Line Leasing…

## Timeline

- **1994-02-18 — Incorporation of…**: Zep Infratech Limited (Financial…
- **1984-03-26 — Incorporation of…**: Star Line Leasing Limited…

## 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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