# In the matter of Vistar Construction Private Limited (IB)-662(ND)-2021

> NCLT judgment dated 2022-08-05. Citation: TCN-2022-NCLT-01444. Pragati Impex India Private Limited, the Financial Creditor, filed an application under Section…

- **Court:** NCLT
- **Order date:** 5 Aug 2022
- **Citation:** TCN-2022-NCLT-01444
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/vistar-construction-private-limited-ib-662nd-2021-c2d64311

## Summary

### Background

Pragati Impex India Private Limited, the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against Vistar Construction Private Limited, the Corporate Debtor. The application was based on a default in payment of a financial debt. The Corporate Debtor, along with its directors, had approached the Financial Creditor in April-May 2018 for a loan of Rs. 1,76,00,000/- for working capital needs related to a project called 'Delhi 1'.

## Facts

Pragati Impex India Private Limited (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) to initiate Corporate Insolvency Resolution Process (CIRP) against Vistar Construction Private Limited (Corporate Debtor). The Corporate Debtor had approached the Financial Creditor in April-May 2018 for a loan of Rs. 1,76,00,000/- for working capital for a project named 'Delhi 1'. The Financial Creditor claimed a default of Rs. 3,87,43,490/-, with the date of default being 30.11.2019. The Financial Creditor submitted documents including a loan agreement dated 31.05.2018, bank statements, and a record of financial information registered with NeSL. The Corporate Debtor did not appear despite notice, leading to an ex-parte order.

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## Issues and analysis

### Issue 1: Whether the Applicant has established a default by the Corporate Debtor in payment of the Financial …

**Ratio:** Section 7(5) of the IBC allows for the admission of an application if the Adjudicating

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**Reasoning:** The Adjudicating Authority observed that the Applicant claimed an amount of Rs.

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**Interpretation:** Section 7 of the IBC provides the mechanism for initiating CIRP by a financial

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**Application:** The Financial Creditor provided sufficient evidence, including loan agreements

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## Parties

- **Judges:** DHARMINDER…; L. N. G…
- **Appellants:** Pragati Impex…
- **Respondents:** Vistar Constructio…; M/s Vistar…

## Timeline

- **2018-04-01 — Loan Appli…**: Corporate Debtor approached Financial…
- **2018-05-31 — Loan Agreeme…**: Date of the 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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