# In the matter of Varsha Corporation Limited CP (IB) 3863-MB-2019

> NCLT judgment dated 2022-06-10. Citation: TCN-2022-NCLT-02268. The case involves an application under Section 7 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 10 Jun 2022
- **Citation:** TCN-2022-NCLT-02268
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/varsha-corporation-limited-cp-ib-3863-mb-2019-72edc15a

## Summary

### Background

The case involves an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, filed by Mr. Rajendra Shah, the Financial Creditor, against Varsha Corporation Limited, the Corporate Debtor, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) due to non-payment of outstanding dues. The Corporate Debtor was incorporated on 26-10-2000. The Financial Creditor drew the court's attention to a promissory note dated 23-02-2012, where the Corporate Debtor promised to repay a loan of Rs. 50,00,000 at 15% interest per annum on demand. The Financial Creditor also submitted confirmation of accounts provided by the Corporate Debtor as on 01-04-2015, confirming the principal amount of debt and accrued interest, totaling Rs. 56.84 Lakh.

## Facts

Mr. Rajendra Shah, the Financial Creditor, filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Varsha Corporation Limited, the Corporate Debtor, due to non-payment of outstanding dues. The Corporate Debtor was incorporated on 26-10-2000. A promissory note dated 23-02-2012 showed the Corporate Debtor promised to repay a loan of Rs. 50,00,000 at 15% interest per annum on demand. As of 01-04-2015, the Corporate Debtor confirmed the principal debt and accrued interest totaled Rs. 56.84 Lakh. On 07-06-2016, the Corporate Debtor acknowledged the loan and handed over a cheque bearing no. 964293 dated 22-10-2016 for Rs. 50,00,000. Two additional cheques, nos. 964332 & 958801 dated

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## Issues and analysis

### Issue 1: Whether the petition filed by the Financial …

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

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**Reasoning:** The court observed that the Financial Creditor had submitted sufficient evidence,

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

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**Application:** In this case, the Financial Creditor provided sufficient evidence to establish

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## Parties

- **Judges:** P.N. Deshmukh…; K.K. V…
- **Appellants:** RAJENDRA…
- **Respondents:** Varsha Corporation…
- **Advocates:** KunalKa…; Tanushree…; +1 more

## Timeline

- **2000-10-26 — Incorporation of…**: Varsha Corporation…
- **2012-02-23 — Promissor…**: Corporate Debtor promised to repay a loan…

## 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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