Avanti Finance Pvt Ltd Vs Labhanshi Multitrade Pvt Ltd (NCLT Indore)
Conclusion: Since the existence of financial debt and default was undisputed and all procedural requirements under Section 7 were satisfied, the petition of Corporate Insolvency Resolution Process (CIRP) against Labhanshi Multitrade Private Limited (Corporate Debtor) deserved admission.
Held: Financial Creditor, Avanti Finance Private Limited, an NBFC filed a petition under Section 7 of the IBC, 2016 against Labhanshi Multitrade Pvt. Ltd. (Corporate Debtor) for default in repayment of ₹1,17,78,807 arising from a term loan of ₹2 crore disbursed on 30.09.2023. The date of default was recorded as 15th April 2024. During the proceedings, the company cited a financial crisis and a complete shutdown of operations, requesting a period of three years to repay the dues. It was held that the debt and default stood duly established. The Corporate Debtor admitted financial hardship and inability to repay but did not dispute the debt. Supporting documents including loan agreement, hypothecation deed, personal guarantees, and NeSL record of default confirmed the claim. The debt was financial in nature under Section 5(8) of the Code; default exceeded the threshold limit under Section 4; and the petition was filed within limitation. Accordingly, the application was admitted under Section 7, moratorium under Section 14 was declared, and Ms. Chhaya Gupta was appointed as Interim Resolution Professional (IRP) to commence CIRP against the Corporate Debtor.
