# In the matter of Starwort Engineers Private Limited

> NCLT judgment dated 2024-07-16. Citation: TCN-2024-NCLT-01000. Q West Infrastructure Private Limited, a financial creditor, filed a petition under Section 7…

- **Court:** NCLT
- **Order date:** 16 Jul 2024
- **Citation:** TCN-2024-NCLT-01000
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/starwort-engineers-private-limited-9e810bb0

## Summary

### Background

Q West Infrastructure Private Limited, a financial creditor, filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Starwort Engineers Private Limited, the corporate debtor, due to a default in repayment of a debt amounting to INR 17,90,73,973. The debt arose from an Inter Corporate Deposit Agreement (ICD Agreement) dated 10.11.2020, where the financial creditor disbursed INR 11,00,00,000 to the corporate debtor. The corporate debtor failed to adhere to the repayment schedule as per the ICD Agreement and a subsequent Settlement Agreement dated 15.02.2023.

## Facts

Q West Infrastructure Private Limited (Financial Creditor) sought to initiate Corporate Insolvency Resolution Process (CIRP) against Starwort Engineers Private Limited (Corporate Debtor) under Section 7 of the Insolvency and Bankruptcy Code, 2016. The basis for the CIRP was a default in repayment of INR 17,90,73,973. An Inter Corporate Deposit Agreement (ICD Agreement) dated 10.11.2020 was executed between the parties, where the Financial Creditor disbursed INR 11,00,00,000 to the Corporate Debtor at an interest rate of 15% p.a. The repayment was due by 10.11.2021. The Corporate Debtor requested an extension, which was granted until 10.11.2022. The Corporate Debtor failed to make the payment. A Settlement Agreement was entered into on 15.02.2023, but the Corporate

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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 primary focus of the Insolvency and Bankruptcy Code is to ensure the revival and

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**Reasoning:** The NCLT considered the arguments presented by both parties and the documents on record.

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**Interpretation:** Section 7 of the IBC allows a financial creditor to initiate CIRP against a

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**Application:** The NCLT found that the application was maintainable because the Corporate

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## Parties

- **Judges:** Prabhat…; V.G. B…
- **Appellants:** Q West Infrastruct…
- **Respondents:** Starwort Engineers…

## Timeline

- **2020-11-10 — Inter Corporate Deposit…**: Financial Creditor and Corporate Debtor entered into an Inter Corporate Deposit Agreement…
- **2020-11-11 — Disbursement of ICD…**: The ICD Amount was disbursed by the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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