# In the matter of VXL Instruments Limited

> NCLT judgment dated 2024-11-26. Citation: TCN-2024-NCLT-00166. Kapishvar Silicates Pvt. Ltd. filed a Company Petition under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 26 Nov 2024
- **Citation:** TCN-2024-NCLT-00166
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/vxl-instruments-limited-200a8580

## Summary

### Background

Kapishvar Silicates Pvt. Ltd. filed a Company Petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against VXL Instruments Ltd., seeking to initiate Corporate Insolvency Resolution Process (CIRP). The petition was based on a default in payment of a financial debt of Rs. 1,48,07,666/-, which occurred on 16.07.2024. Kapishvar Silicates and VXL Instruments had entered into an Inter-Corporate Deposit Agreement on 03 April 2024, where Kapishvar Silicates agreed to provide an inter-corporate deposit of Rs. 1,50,00,000/- to VXL Instruments at an interest rate of 15% per annum. VXL Instruments experienced financial difficulties and was unable to repay the outstanding amount, including interest. Kapishvar Silicates issued a notice on 28 May 2024, recalling the

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## Facts

Kapishvar Silicates Pvt. Ltd. (Financial Creditor) and VXL Instruments Ltd. (Corporate Debtor) entered into an Inter-Corporate Deposit Agreement dated 03 April 2024, where Kapishvar Silicates agreed to provide an inter-corporate deposit of Rs. 1,50,00,000/- to VXL Instruments at an interest rate of 15% per annum compounded monthly. The agreement stipulated that interest payments were to commence from 30 April 2024. Kapishvar Silicates disbursed Rs. 1,45,00,000/- to VXL Instruments. VXL Instruments defaulted on the interest payment due on 05 May 2024, amounting to Rs. 1,72,131/- for the month of April 2024. Kapishvar Silicates sent a letter dated 28 May 2024, recalling the interest due. VXL Instruments acknowledged the debt in a reply dated 05 June 2024, citing

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## Issues and analysis

### Issue 1: Whether VXL Instruments Ltd. defaulted on its financial obligations to Kapishvar Silicates Pvt. …

**Ratio:** A default occurs when a debtor fails to pay a debt when it becomes due and payable. The

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**Reasoning:** The court noted that VXL Instruments had acknowledged the debt and the default in its

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**Interpretation:** The legal interpretation of 'default' under Section 7 of the IBC encompasses

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**Application:** In this case, VXL Instruments' failure to pay the interest due, despite

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## Parties

- **Judges:** Reeta K…; Madhu S…
- **Appellants:** Kapishvar…
- **Respondents:** VXL Instruments…; VXL Instruments…

## Timeline

- **2024-04-03 — Inter-Corporate Deposit…**: Kapishvar Silicates and VXL Instruments entered…
- **2024-04-30 — Interest Payment Start…**: Interest payments were…

## 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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