# In the matter of TIAAN Consumer Limited

> NCLT judgment dated 2023-10-11. Citation: TCN-2023-NCLT-01294. Mekaster Finlease Ltd. filed an application under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 11 Oct 2023
- **Citation:** TCN-2023-NCLT-01294
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/tiaan-consumer-limited-a2c25608

## Summary

### Background

Mekaster Finlease Ltd. filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Tiaan Consumer Limited for initiation of Corporate Insolvency Resolution Process (CIRP) due to default in payment of outstanding dues amounting to Rs. 1,55,31,200/-. The Financial Creditor, Mekaster Finlease Ltd., claimed that the Corporate Debtor, Tiaan Consumer Limited, had availed a business loan for expanding their business, and a loan agreement was executed on 02/01/2023 for Rs. 1.50 Crore. The Financial Creditor disbursed Rs. 1.46 Crores to the Corporate Debtor. The Corporate Debtor defaulted on repayment, leading to the issuance of a loan recall notice. The Corporate Debtor admitted to receiving the loan amount but cited financial difficulties due to

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## Facts

Mekaster Finlease Ltd. (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Tiaan Consumer Limited (Corporate Debtor) for defaulting on a loan repayment. A business loan agreement was executed on 02/01/2023, where the Financial Creditor agreed to lend Rs. 1.50 Crore to the Corporate Debtor. The Financial Creditor disbursed Rs. 1.46 Crores to the Corporate Debtor on 2.1.2023 and 2.2.2023. The loan was to be repaid by 15/03/2023, with an interest rate of 12% p.a. at monthly rests and a penal interest of 12% over and above the interest rate for the defaulted amount. The Corporate Debtor defaulted on repayment, leading the Financial Creditor to issue a loan recall notice on 18/03/2023. The Corporate Debtor replied

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## Issues and analysis

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

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

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**Reasoning:** The Adjudicating Authority considered the submissions and documents presented by the

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

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**Application:** The Financial Creditor demonstrated the existence of a financial debt and

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## Parties

- **Judges:** SHAMMI…; SAMEER…
- **Appellants:** Mekaster Finlease…
- **Respondents:** Tiaan Consumer…; Tiaan Consu…

## Timeline

- **2023-01-02 — Loan Agre…**: Business Loan Agreement executed between Mekaster Finlease Ltd. and Tiaan Consumer…
- **2023-02-01 — Loan Disbur…**: Mekaster Finlease Ltd. disbursed Rs. 1.46 Crores to Tiaan Consumer Limited on 2.1.2023…

## 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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