# In the matter of Starlit Powers Systems Limited Company Petition No. (IB)-744(ND)-2022

> NCLT judgment dated 2023-03-20. Citation: TCN-2023-NCLT-04140. Advani Private Limited, the Financial Creditor, filed a petition under Section 7 of the…

- **Court:** NCLT
- **Order date:** 20 Mar 2023
- **Citation:** TCN-2023-NCLT-04140
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/starlit-powers-systems-limited-company-petition-no-ib-744nd-2022-a8d08033

## Summary

### Background

Advani Private Limited, the Financial Creditor, filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s. Starlit Power Systems Limited, the Corporate Debtor. The petition was based on a default in repayment of a loan provided by Advani Private Limited to Starlit Power Systems Limited. The Corporate Debtor had approached the Financial Creditor for a working capital loan of Rs. 1,00,00,000/-, which was sanctioned as per a sanction letter dated 09.04.2019. The disbursement commenced on 02.05.2019, with an interest rate of 12%. The Corporate Debtor defaulted on its repayment obligations, leading to the filing of the petition.

## Facts

Advani Private Limited (Financial Creditor) provided a working capital loan of Rs. 1,00,00,000/- to M/s. Starlit Power Systems Limited (Corporate Debtor) as per a sanction letter dated 09.04.2019. The disbursement commenced on 02.05.2019, with an interest rate of 12%. The Corporate Debtor defaulted on the repayment, leading to a total claim of Rs. 1,07,50,337/-, including principal (Rs. 89,20,000/-) and interest (Rs. 18,30,337/-). The date of default was 01.05.2021. The Financial Creditor filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate CIRP against the Corporate Debtor. The Corporate Debtor admitted to the debt and default but cited financial difficulties and restructuring efforts. The Corporate Debtor had also availed credit

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## Issues and analysis

### Issue 1: Whether the petition 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 Adjudicating Authority examined the petition and found it to be complete. The

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

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**Application:** The petition was found to be complete, as it contained all the necessary

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## Parties

- **Judges:** Sh. Ashok Kumar…; L. N. G…
- **Appellants:** Advani Private…
- **Respondents:** Starlit Power…; M/s. Starlit…

## Timeline

- **2008-03-04 — Incorporation of…**: M/s. Starlit Power Systems Limited was incorporated under the provisions of Companies…
- **2012-02-07 — Credit Facility from…**: Corporate Debtor availed credit facility worth Rs.325 lakhs from Punjab National Bank,…

## 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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