# In the matter of Sri Sai Car Sales Private Limited

> NCLT judgment dated 2023-07-12. Citation: TCN-2023-NCLT-05331. Hi-Tech Designs Pvt Ltd and S. K. Finserve Private Limited filed a petition under Section 7 of…

- **Court:** NCLT
- **Order date:** 12 Jul 2023
- **Citation:** TCN-2023-NCLT-05331
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-kolkata/sri-sai-car-sales-private-limited-637cc5bd

## Summary

### Background

Hi-Tech Designs Pvt Ltd and S. K. Finserve Private Limited filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Sri Sai Car Sales Private Limited, the Corporate Debtor, due to defaults in loan repayments.

## Facts

Hi-Tech Designs Pvt Ltd (Financial Creditor No. 1) disbursed a loan of Rs. 1,00,00,000/- to Sri Sai Car Sales Private Limited (Corporate Debtor) on February 25, 2021, with an interest rate of 16% per annum and an additional 2% as penal interest in case of delay.

S. K. Finserve Private Limited (Financial Creditor No. 2) disbursed a loan of Rs. 60,00,000/- to Union Motors, with Sri Sai Car Sales Private Limited acting as a corporate guarantor, with an interest rate of 18.5% P.A. and a penal interest of 4% P.A.

Sri Sai Car Sales Private Limited defaulted in repayment of the loan to Hi-Tech Designs Pvt Ltd from April 1, 2022, with an outstanding amount of Rs. 87,17,049/-.

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## Issues and analysis

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

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

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**Reasoning:** The Adjudicating Authority considered the loan agreements, demand notices, and other

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**Interpretation:** The Authority interpreted Section 7 of the IBC to mean that if a debt and

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**Application:** The Authority found that the Corporate Debtor had defaulted on its loan

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## Parties

- **Judges:** BIDISHA BA…; Balraj…
- **Appellants:** Hi-Tech Designs…; S. K. Finserve…
- **Respondents:** Sai Car Sales…
- **Other parties:** Birendra Kumar…
- **Advocates:** Sankarsan…; Tanmoy…; +1 more

## Timeline

- **2021-02-24 — Loan Agre…**: Loan agreement dated February 24, 2021 between Hi-Tech Designs Pvt Ltd and Sri Sai Car…
- **2021-02-25 — Loan Disbur…**: Hi-Tech Designs Pvt Ltd disbursed Rs. 1…

## 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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