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2025 Supreme(Online)(NCLT) 2604
NATIONAL COMPANY LAW TRIBUNAL
Moniveda Consultants LLP VS
IA(I.B.C) - 911/2022
For the Petitioner:Anup Khaitan
The court ruled that dishonor of a cheque constitutes a date of default for initiating Corporate Insolvency Resolution Process under the Insolvency and Bankruptcy Code.
Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Section 7 - Corporate Insolvency Resolution Process - An application for initiation of CIRP was admitted based on default in repayment of a financial debt. The Corporate Debtor had dishonored a cheque for the repayment of a loan, justifying the Financial Creditor's claims. (Paras 8.1, 8.4, 8.9)
(B) Fraudulent Proceedings - Allegations of collusion and fraud by the Applicants/Intervenors were dismissed as unsubstantiated; intervention by directors or shareholders at pre-admission stage is not permissible under the Code. (Paras 8.2, 8.3)
Facts of the case:
The Financial Creditor filed an application after the Corporate Debtor failed to repay a loan of Rs.1,00,00,000. A cheque issued for repayment was dishonored on 29.03.2021, leading to the application under CIRP. (Paras 1.4, 8.5)
Findings of Court:
Verified that the loan was a financial debt, default was established, and the MAC was dismissed while admitting the CIRP application. (Paras 8.6, 8.9)
Issues: Existence of financial debt; date of default; maintainability of intervention application by third parties. (Paras 8.2, 8.4)
Ratio Decidendi: The court emphasized that direct involvement of directors/shareholders cannot interfere at the pre-admission stage of insolvency proceedings; default is established upon dishonor of a cheque. (Paras 8.2, 8.4, 8.5)
Result: The main application for CIRP was admitted, and the interim resolution professional was appointed to oversee the process.
| Table of Content |
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| 1. cirp initiation process outlined. (Para 1) |
| 2. order for admission of main application and irp appointment. (Para 9) |
ORDER
[PER: SANJIV DUTT, MEMBER (TECHNICAL)]
1. BACKGROUND
1.1 This is an Application bearing C.P. (IB) No. 102/MB/2022 (Main Application) filed by Vijaypath Management Private Limited, the Financial Creditor on 16.12.2021 under Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as “the Code”) read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 through Mr. Namit Jain, duly authorised vide Board Resolution dated 12.08.2021 for initiating Corporate Insolvency Resolution Process (hereinafter referred to as “CIRP”) in respect of JLS Realty Private Limited, the Corporate Debtor.
1.2 The Corporate Debtor approached the Financial Creditor to provide financial assistance. The Financial Creditor sanctioned two credit facilities vide its disbursement letter dated 04.04.2013 for an amount of Rs.35,00,000/- (Thirty- Five Lakh Rupees) and another disbursement letter dated 29.10.2013 for an amount of Rs.65,00,000/- (Sixty-Five Lakh Rupees), both for a period of 120 days. Both the credit facilities were merged and the interest was charged on the whole sum of Rs.1,00,00,000 (One Crore Rupees) @ 12% p.a. The credit facilities were renewed from time to time and the same was accepted by the Corporate Debtor. Interest on loan amount was changed from 12% p.a. to 16% p.a. vide letter dated 19.12.2016 and the Corporate Debtor acknowledged the same.
1.3 The facility was last renewed on 01.01.2021 and the Corporate Debtor issued post-dated cheques (PDCs) in favour of the Financial Creditor with the understanding that the loan would be repaid on the due date. However, the Corporate Debtor failed to repay the debt. The cheque bearing No. 001523 dated 01.01.2021 drawn on Bank of Baroda, Mumbai for an amount of Rs.1,00,00,000/- was presented to Kotak Mahindra Bank, Sarat Bose Road, Kolkata Branch, Kolkata on 26.03.2021 for encashment. The said cheque was, however, returned dishonored by the Bank of Baroda with the endorsement ‘Funds Insufficient’.
1.4 Since the Corporate Debtor failed to repay the outstanding debt, the Financial Creditor has preferred the present Application seeking initiation of CIRP in respect of the Corporate Debtor.
2. AVERMENTS OF FINANCIAL CREDITOR
2.1 As stated above, the Corporate Debtor was sanctioned two credit facilities by the Financial Creditor for an amount of Rs.35,00,000/- vide disbursement letter dated 04.04.2013 and Rs.65,00,000/- vide disbursement letter dated on 29.10.2013 for a period of 120 days at the interest rate of 12% p.a. As against the loan granted, the Corporate Debtor had drawn Demand Promissory Notes in favour of the Financial Creditor along with PDCs for the principal and interest amount separately and Letter of Undertaking for PDCs.
2.2 The financial assistance was later clubbed w.e.f. 14.04.2014 vide renewal letter dated 13.04.2014 and the total amount of debt after renewal stood at Rs.1,00,00,000/- (One Crore Rupees) for 120 days with 12% p.a. rate of interest.
2.3 The credit facilities were thereafter renewed from time to time and the same was accepted by the Corporate Debtor by issuing PDCs and interest for the same was received by the Financial Creditor. The rate of interest was enhanced from 12% p.a. to 16% p.a. by renewal letter dated 19.12.2016 and the same was acknowledged by the Corporate Debtor.
2.4 Further, the credit facilities were again renewed from 20.12.2016 to 31.03.2020 and the interest on the same was also received. However, from 01.04.2020, the Corporate Debtor deliberately neglected in paying the interest amount. On the request and assurance of the Corporate Debtor, the Financial Creditor last renewed the credit facility on 01.01.2021 with the understanding that the outstanding loan amount would be repaid on the due date.
2.5 However, the Corporate Debtor failed to honour its payment obli
