# In the matter of Yours Ethnic Foods Pvt. Ltd.

> NCLT judgment dated 2023-10-09. Citation: TCN-2023-NCLT-01335. Svakarma Finance Private Limited filed an application under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 9 Oct 2023
- **Citation:** TCN-2023-NCLT-01335
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/yours-ethnic-foods-pvt-ltd-c26d872e

## Summary

### Background

Svakarma Finance Private Limited filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Yours Ethnic Foods Pvt Ltd, seeking to initiate the Corporate Insolvency Resolution Process (CIRP). The application was based on a default in repayment of a loan facility extended by Svakarma Finance to Yours Ethnic Foods. The financial creditor sanctioned a working capital term loan of Rs 1,10,00,000 on July 18, 2019, with an agreement executed on July 25, 2019. The loan tenure was three years, beginning August 20, 2019, and ending July 20, 2022, with a 14% interest rate. The corporate debtor availed a moratorium option offered by RBI due to COVID-19, extending the loan tenure to 38 months, with the last installment due on Feb 23, 2023. The

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## Facts

Svakarma Finance Private Limited (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) against Yours Ethnic Foods Pvt Ltd (Corporate Debtor) to initiate Corporate Insolvency Resolution Process (CIRP). The Financial Creditor sanctioned a working capital term loan of Rs 1,10,00,000 to the Corporate Debtor on July 18, 2019, with an agreement executed on July 25, 2019. The loan tenure was for three years, from August 20, 2019, to July 20, 2022, at 14% interest. The Corporate Debtor availed a moratorium due to COVID-19, extending the tenure to 38 months, with the last installment due on Feb 23, 2023. The Corporate Debtor defaulted on repayments since January 20, 2020. The Financial Creditor issued a demand notice on

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## Issues and analysis

### Issue 1: Whether the application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 is …

**Ratio:** Section 7(5) of the Insolvency and Bankruptcy Code, 2016, stipulates that the

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**Reasoning:** The Tribunal examined the documents submitted by the Financial Creditor, including the

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

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**Application:** In this case, the Tribunal found that the application was complete based on the

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## Parties

- **Judges:** Chitra Ha…; V. G. Venkata…
- **Appellants:** Svakarma Finance…
- **Respondents:** Yours Ethnic…; Yours Ethnic Pvt…
- **Advocates:** Priyal P…; Kuldeep A…

## Timeline

- **2019-07-18 — Loan Sanc…**: Financial creditor sanctioned a working capital term loan of Rs 1,10,00,000 to the…
- **2019-07-25 — Loan Agreement…**: Agreement executed between the…

## 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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