# In the matter of Vr Commodities Private Limited

> NCLT judgment dated 2024-07-01. Citation: TCN-2024-NCLT-01095. The application was filed under Section 7 of the Insolvency and Bankruptcy Code (IBC) by 10…

- **Court:** NCLT
- **Order date:** 1 Jul 2024
- **Citation:** TCN-2024-NCLT-01095
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/vr-commodities-private-limited-3d3c61cd

## Summary

### Background

The application was filed under Section 7 of the Insolvency and Bankruptcy Code (IBC) by 10 applicants, collectively acting as Financial Creditors (FCs). These FCs had extended loans to VR Commodities Private Limited, the Corporate Debtor (CD). The application sought the initiation of the Corporate Insolvency Resolution Process (CIRP) against the CD due to defaults in loan repayment. The applicants claimed to have extended a total loan of Rs. 3.35 Crores to the CD for a period of five months starting from July 4, 2022, with monthly interest rates ranging from 1.75% to 2.30%. These loans were documented through Promissory Notes. The CD, in its counter, claimed that the applicants were its customers who had made advance payments for coal supply, amounting to Rs.

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## Facts

Ten applicants, acting as Financial Creditors (FCs), filed an application under Section 7 of the Insolvency and Bankruptcy Code (IBC) against VR Commodities Private Limited, the Corporate Debtor (CD), seeking initiation of the Corporate Insolvency Resolution Process (CIRP) due to defaults in loan repayment. The FCs claimed to have extended loans totaling Rs. 3.35 Crores to the CD for a five-month period starting from July 4, 2022, with monthly interest rates ranging from 1.75% to 2.30%. These loans were documented through Promissory Notes. The CD acknowledged receiving Rs. 3,01,31,250 but claimed these were advances for coal supply, not loans, and that Rs. 46 lakhs had been returned. The CD also argued that the Promissory Notes were invalid because they were signed by

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the IBC for initiation of CIRP against the Corporate …

**Ratio:** Section 7 of the IBC allows a financial creditor to initiate CIRP against a corporate

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**Reasoning:** The court found that the Corporate Debtor had defaulted on its repayment obligations to

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**Interpretation:** Section 7 of the IBC provides a mechanism for financial creditors to recover

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**Application:** The court applied Section 7 of the IBC to the facts of the case and found that

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## Parties

- **Judges:** Rajeev Bh…; Sanjay…
- **Appellants:** Ashok Kumar Jain…
- **Respondents:** VR Commodities…

## Timeline

- **2022-07-04 — Loan Exte…**: Financial Creditors extended loans to VR Commodities Private Limited starting from this…
- **2022-12-04 — Repayment…**: Repayment date after…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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