# In the matter of Thea Online Services Private Limited CP(IB)No.784-MB-IV-2021

> NCLT judgment dated 2022-01-28. Citation: TCN-2022-NCLT-04336. Open Sky Shopping LLP, the Financial Creditor/Applicant, filed an application under Section 7…

- **Court:** NCLT
- **Order date:** 28 Jan 2022
- **Citation:** TCN-2022-NCLT-04336
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/thea-online-services-private-limited-cpibno784-mb-iv-2021-98f1110b

## Summary

### Background

Open Sky Shopping LLP, the Financial Creditor/Applicant, filed an application under Section 7 of the Insolvency & Bankruptcy Code, 2016 (I&B Code) against Thea Online Services Private Limited, the Corporate Debtor, for initiating Corporate Insolvency Resolution Process (CIRP). The Financial Creditor claimed a total default of Rs.1,03,45,000/- along with interest at 1.5% per month. The loan amount was disbursed between 20.01.2021 and 17.02.2021. The Corporate Debtor argued that the amount given by the Financial Creditor was in the nature of an investment and not as financial debt.

## Facts

Open Sky Shopping LLP (Financial Creditor) filed an application under Section 7 of the I&B Code against Thea Online Services Private Limited (Corporate Debtor) for initiating CIRP. The Financial Creditor claimed a default of Rs.1,03,45,000/- plus interest. The loan agreement was executed on 01.01.2021, and the loan was disbursed between 20.01.2021 and 17.02.2021. The Corporate Debtor argued that the amount was an investment, not a loan. The date of default was 07.04.2021, and the petition was filed on 09.08.2021. The Corporate Debtor admitted its liability in a reply dated 16.06.2021. The Financial Creditor submitted a NeSL report dated 20.07.2021, reflecting the outstanding amount. The Corporate Debtor requested time to repay the amount due to financial difficulties.

## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor under Section 7 of the I&B Code is …

**Ratio:** Section 7 of the I&B Code allows a financial creditor to initiate CIRP against a

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**Reasoning:** The NCLT found that the Corporate Debtor had defaulted in payment of debt and that the

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

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**Application:** The NCLT applied Section 7 to the facts of the case, finding that the Financial

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## Parties

- **Judges:** RAJESH S…; KISHORE VEMULAPALL…
- **Appellants:** Open Sky Shopping…
- **Respondents:** Thea Online…

## Timeline

- **2021-01-01 — Loan Agreement…**: Loan Agreement dated 01.01.2021 was executed between the Financial Creditor and the…
- **2021-01-20 — Loan Disbursem…**: Loan amount was disbursed…

## 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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