# In the matter of Vatavruksha Entertainment Private Limited CP (IB) 407-MB-2022

> NCLT judgment dated 2023-01-19. Citation: TCN-2023-NCLT-04991. The case involves a petition filed by Samata Nagari Sahkari Patsanstha Maryadit (Financial…

- **Court:** NCLT
- **Order date:** 19 Jan 2023
- **Citation:** TCN-2023-NCLT-04991
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/vatavruksha-entertainment-private-limited-cp-ib-407-mb-2022-d4948c3c

## Summary

### Background

The case involves a petition filed by Samata Nagari Sahkari Patsanstha Maryadit (Financial Creditor) under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Vatavruksha Entertainment Private Limited (Corporate Debtor) due to default in repayment of a loan. The Financial Creditor had extended credit facilities to the Corporate Debtor, including a term loan and a working capital term loan. The Corporate Debtor defaulted on the repayment, leading to the filing of the petition. The Financial Creditor had previously attempted to resolve the issue by restructuring the loan and initiating legal proceedings.

## Facts

Samata Nagari Sahkari Patsanstha Maryadit, a cooperative society, extended credit facilities to Vatavruksha Entertainment Private Limited, a private company incorporated on 12/03/2014. The Corporate Debtor applied for a term loan of Rs.1,25,00,000/- on 11.03.2019, which was approved by the Financial Creditor on 24.03.2019. A deed of mortgage was executed on 30.03.2019 for an additional amount of Rs.25,00,000/-. The loan amount of Rs.1,25,00,000/- was disbursed on 30.03.2019. The Corporate Debtor defaulted on the repayment of the loan, with the initial default occurring on 01.05.2019. The amount claimed to be in default as of 30.11.2021 was Rs.1,58,62,738/-. The Financial Creditor issued a final demand notice on 29.07.2019 and published summons in newspapers on

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor committed a default in …

**Ratio:** The ratio is that if a debt and default are proven, the adjudicating authority is bound

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**Reasoning:** The court reasoned that the Financial Creditor presented sufficient evidence, including

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**Interpretation:** This interprets Section 7 of the IBC in light of the Supreme Court's ruling,

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**Application:** The ratio and reasoning were applied to the specific facts of the case, where

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## Parties

- **Judges:** P.N. Des…; Shyam Babu…
- **Appellants:** SAMATA NAGARI…
- **Respondents:** VATAVRUKSHA…

## Timeline

- **2019-03-11 — Application for Term…**: Corporate Debtor applied for a…
- **2019-03-24 — Loan App…**: Financial Creditor approved…

## 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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