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Judgment
This Application has been filed on 09.05.2025 on behalf of the Dhull Trading Pvt Ltd (hereinafter referred as “Applicant / Financial Creditor”) under Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred as “IBC”) read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules 2016 against Dhrovv India Limited (hereinafter referred as “Corporate Debtor”) in Form 1 containing all the information as required in Part I, II, III, IV and V of the Form showing a total financial debt of Rs. 2,34,00,000/- towards Principal along with Interest amounting to Rs.92,51,982/- with the date of default as specified in the application being 01.10.2023.
The Corporate Debtor was incorporated on 20.05.2998 under the Companies Act 1956, having its registered office at Flat no. 41 Ground floor Sector 22 Noida, Gautam Buddha Nagar UP 201301, which is under the jurisdiction of this Tribunal. The Corporate Debtor is engaged in a high-end, fully automated dry-cleaning business across Delhi NCR, investing about ₹600 lakhs in fixed assets. With a registered brand and a client base including major hospitals, 3–5-star hotels, corporates, and the general public, it established 30–35 outlets and franchisees.
As stated in the application, on the request of Corporate Debtor, the Financial Creditor vide Board Resolution dated 04.01.2023, agreed to lend loan amount upto Rs. 2,50,00,000/- to the Corporate Debtor for a period upto 30.09.2023 after which the amount was payable along with interest. Subsequently, Financial Creditor and the Corporate Debtor executed Memorandum of Understanding ("MOU" or "Agreement") dated 14.01.2023 in terms of which the Lender Financial Creditor will disburse the Loan amount of Rs. 2,50,00,000/-, under the MOU in the bank account of the Borrower Corporate Debtor, within 45 days of execution of the MOU and fulfilment of the Corporate Debtor's condition for the funds under this MOU and further agreement to pay interest and additional charges on the Loan. As per the agreed terms, the Financial Creditor disbursed the loan amount of Rs. 2,34,00,000/- from time to time in different installments through RTGS in account number 022405500626 of ICICI Bank as provided by the Corporate Debtor and the same was accepted by it. As per the agreed MOU, the term of loan was upto 30.09.2023. Therefore, as per the terms, the repayment of the loan became due and payable on 01.10.2023. As no payment was made, the default occurred, and hence the date of default is 01.10.2023.
As the Corporate Debtor continued to fail to comply with and adhere to the terms and conditions of the MOU of aforesaid financial assistance and failed to repay the amount due under the aforesaid loan. Despite repeated requests and demands of the Financial Creditor, the repayment of loan by the Corporate Debtor was not done thereby committing default. The Financial Creditor issued notice on 29.11.2023 and on 11.12.2023 through registered post recalling the loan. The said notices were delivered to the Corporate Debtor but the outstanding amount still remained unpaid. As provided in Part IV, a total amount of Rs. 3,26,51,982/- is due as financial debt (Rs. 2,34,00,000/- towards Principal alongwith Rs.92,51,982/- and @ 15% + 3% (Penal Interest calculated from 01.10.2023 till 31.03.2025) thereon is due as outstanding against the Corporate Debtor.
In response to the Application, the Corporate Debtor filed a counter affidavit vide Diary No. 1609 dated 12.08.2025, wherein it was submitted that due to financial distress caused by multiple reasons, there has been a debt and default in repayment of the outstanding amount. The relevant paragraphs establishing the debt and default on the part of Corporate Debtor are reproduced hereunder:
“9.That as per the terms of the Loan Agreement the amount received was for a term upto 30.9.2023 and had to be repaid from 1.10.2023 along with the applicable interest, but the Corporate Debtor despite best efforts could not do so and needed more time for repayment.
12.That the Company Acknowledges debt of Financial Creditor and ready to pay but seeks time of one year to be able to repay the same to the Petitioner and prays for the indulgence of this Hon'ble Tribunal.
17.That it is submitted that the corporate debtor/management despite best efforts and intentions have not been able to clear the debt of the Financial Creditor due to the financial crisis being faced by it."
Further, the Corporate Debtor has prayed for extension for a period of six months to enable revival of the company and submission of a proposed settlement plan to the Financial Creditor/Applicant.
During the hearing held on 27.10.2025, the Ld. Counsel representing the Corporate Debtor admitted the debt and default but he sought further time of 12 months for outstanding loan amount for settling the default in debt repayment.
FINDINGS AND ORDER
We have considered the submissions made in the pleadings filed by the parties and have perused the record and have also taken into account the oral arguments made by their respective Ld. Counsels during the course of the hearings.
From the submission of learned Counsel for the parties and analysis of the records, we find that there are two issues that have arisen for consideration before us as stated below: -
Whether the application is filed within the period of limitation. ii. Whether there are debt and default within the meaning of the I & B Code, 2016.
Whether the application is filed within the period of limitation.
We observe that the present application under Section 7 of the Code was instituted before this Tribunal on 09.05.2025. The cause of action for filing the present application arose on 01.10.2023 when the borrower failed in repaying the outstanding loan amount of Rs. 2,34,00,000/- alongwith interest and hence defaulted on 01.10.2023, and hence the date of default is 01.10.2023. The Applicant also served notices of repayment of loan amount dated 29.11.2023 and 11.12.2023 to the Corporate Debtor but no response was received and the Corporate Debtor continued the default and it neither deposited the outstanding amount nor settled the accounts. Hence, there is no ambiguity with regards to date of default and resulting limitation period. Accordingly, the filing of the present application on 09.05.2025 falls within the prescribed period of limitation of three years under Article 137 of the Limitation Act, 1963 from the date of default being on 01.10.2023.
Whether there are debt and default within the meaning of the I & B Code, 2016?
On the facts of the present case, there is no dispute that sums to the tune of Rs. 2,34,00,000/- have been disbursed by the Applicant in terms of the MOU dated 14.01.2023 to the Corporate Debtor, as reflected in the copy of Computation sheet annexed as Annexure 7 of the Application related to outstanding amount as shown in accounts of Corporate Debtor. The Loan carried interest at the rate of 15% per annum on outstanding loan amount under the MOU from the date of settlement is loan amount in full. The term of the loan as per MOU was upto 30.09.2023. Hence, the payment became due and payable on 01.10.2023. The cause of action for filing the present application arose on 01.10.2023 when the borrower failed in repayment of installments and interest and also failed to repay the overdue amount defaulted on 01.10.2023. Therefore, existence of a debt above a threshold limit of Rs. 1 crore and being under default of non repayment is clearly established and also admitted by the Corporate Debtor in its reply to the present application and the same has again been admitted by the Ld. Counsel for the Corporate Debtor during the course of the hearing held on 27.10.2023.
He orally submitted during the said hearing that he further sought a 12 months period for repayment of the outstanding loan amount for settling the default in debt repayment. However, it is pertinent to note that there exists no such provision which provides any power to the Adjudicating Authority to grant extension to the Corporate Debtor to repay the outstanding amount due towards Financial Creditor. Therefore, no such extension has been considered by us to grant to the Corporate Debtor.
Thus, in view of the aforesaid analysis, the Applicant / Financial Creditor has proved that there is a ‘debt’ and a ‘default’ on the part of the Corporate Debtor and such default is still continuing. Hence, as per Section 7(5) of IBC, 2016, the present application is found to be fulfilling all the conditions for admissions of the Application and initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor i.e. Dhrov India Limited.
In view of our above findings, we are satisfied that the Applicant/Financial Creditor has proved the debt and the default, which is more than the threshold limit of Rs.1 crore applicable at present. The registered office of the Corporate Debtor is located in Noida and hence this Tribunal has jurisdiction to decide the matter. The application is also filed within limitation period and complete in all respect and a resolution professional is also proposed as per section 7(3)(b). Accordingly, the present application under Section 7, has been found fit to be admitted as per Section 7(5) of the I & B Code, 2016.
Accordingly, this Tribunal allow this application and order to initiate the Corporate Insolvency Resolution Process against the Corporate Debtor.
We note that the Financial Creditor has proposed the name of IRP in Part-III of the Application. The Financial Creditor has proposed the name of Mr. Madan Lal Aggarwal as Interim Resolution Professional (IP Entity / Corporate IP) having Registration Number: IBBI/IPA-002/IP-N00497/2017-2018/11553, Email ID: aggarwalmadan@gmail.com. The IRP has duly given the consent in Form No. 2 dated 07.04.2025 annexed as Annexure No.3 with the Application. The Law Research Associate of this Tribunal, Mr. Sarim Husain, has checked the credentials of Mr. Madan Lal Aggarwal, and found that there are no disciplinary proceedings pending against the proposed Insolvency Professional (Corporate IP) and also there is nothing adverse against them. Upon verification from the website of IBBI, it is found that Insolvency Professional (Corporate IP) holds valid authorization till 31.12.2025. After considering these details, we appoint Mr. Madan Lal Aggarwal having registration No. IBBI/IPA-002/IP-N00497/2017-2018/11553, as Interim Resolution Professional (IRP).
Accordingly, this application is admitted u/s 7 of the Code, 2016, under the following terms and conditions.
The application filed by the Financial Creditor under Section 7 of the Insolvency & Bankruptcy Code, 2016 for initiating the Corporate Insolvency Resolution Process against the Corporate Debtor i.e., Dhrov India Limited is hereby admitted.
We hereby declare a moratorium and public announcement in accordance with Sections 13 and 15 of the I & B Code, 2016.
This Adjudicating Authority hereby appoints Mr. Madan Lal Aggarwal to act as the IRP under Section 13(1)(c) of the Code as decided by us in para 15 above.
The IRP shall cause a public announcement for the initiation of the Corporate Insolvency Resolution Process against the Corporate Debtor and call for the submission of claims under Section 15. The public announcement referred to in clause (b) of sub-section (1) of Section 15 of the Insolvency & Bankruptcy Code, 2016 shall be made immediately.
Moratorium under Section 14 of the Insolvency & Bankruptcy Code, 2016 has commenced from the date of this order prohibiting the following:
The institution of suits or continuation of pending suits or proceedings against the Corporate Debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority;
Transferring, encumbering, alienating or disposing of by the Corporate Debtor any of its assets or any legal right or beneficial interest therein;
Any action to foreclose, recover or enforce any security interest created by the Corporate Debtor in respect of its property including any action under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002);
The recovery of any property by an owner or lessor where such property is occupied by or in the possession of the Corporate Debtor.
Apart from above prohibitions in respect of the corporate debtor, it is further directed that the supply of essential goods or services to the corporate debtor as may be specified, shall not be terminated or suspended or interrupted during the moratorium period.
The provisions of Section 14(3) shall, however, not apply to such transactions as may be notified by the Central Government in consultation with any financial sector regulator and to a surety in a contract of guarantee to a corporate debtor.
The order of moratorium shall have effect from the date of this order till completion of the corporate insolvency resolution process or until this Bench approves the resolution plan under sub-section (1) of Section 31 or passes an order for liquidation of the corporate debtor under Section 33 as the case may be.
The IRP is directed to take steps as mandated under section 13 and 15 of the IBC for making public announcement about the commencement of CIRP against the Corporate Debtor and moratorium against it u/s 14, and also take necessary actions as per sections 17, 18, 20 and 21 of IBC, 2016.
The IRP shall after collation of all the claims received against the Corporate Debtor and the determination of the financial position of the Corporate Debtor and to constitute a Committee of Creditors ( hereinafter referred as “COC”) and shall file a report certifying the constitution of the COC to this Tribunal on or before the expiry of thirty days from the date of his appointment, and shall convene the first meeting of the COC within seven days of filing the report of the constitution of the COC.
The COC in its first meeting shall appoint a Resolution Professional (hereinafter referred as “RP”) as per the provision of section 22(2) and file an application before this Tribunal for confirmation of the appointment of the RP.
The Suspended Board of Directors of the corporate debtor is directed to give to IRP/RP complete access to the Books of Accounts of the corporate debtor maintained under section 128 of the Companies Act. In case, the books are maintained in the electronic mode, the Suspended Board of Directors are to share with the IRP/RP all the information regarding maintaining the Backup and regarding service provider kept under Rule 3(5) and Rule 3(6) of the Companies Accounts Rules, 2014 respectively as effective from 11.08.2022, especially the name of the service provider, the internet protocol of the service provider and its location, and also address of the location of the Books of Accounts maintained in the cloud. In case, accounting software for maintaining the books of accounts is used by the corporate debtor, then IRP/RP is to check that the audit trail in the same is not disabled as required under the notification dated 24.03.2021 of the Ministry of Corporate Affairs.
The Statutory Auditor is directed to share with the Resolution Professional the audit documentation and the audit trails, which they are mandated to retain pursuant to SA-230 (Audit Documentation) prescribed by the Auditing and Assurance Standards Board ICAI.
The IRP/RP is directed to take custody and control of all the records of information relating to assets of the Corporate Debtor, its Books of Account in physical form or the computer systems storing the electronic records at the earliest in accordance with the provision of Regulation 3A of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (hereinafter referred to as “CIRP Regulations, 2016”).
The Operational Creditor shall also provide necessary assistance to IRP/RP in obtaining the necessary information about the Corporate Debtor as envisaged in Regulation 4(3) of the CIRP Regulations, 2016.
In case of any non-cooperation by the Suspended Board of Directors or the Statutory Auditors, IRP/RP may take the help of the local police authorities to enforce this order. The concerned police authorities are directed to extend help to the IRP/RP in implementing this order for the retrieval of relevant information from the systems of the corporate debtor.
The IRP/RP may take the assistance of Digital Forensic Experts empanelled with this Bench/IBBI/MCA for this purpose.
The Suspended Board of Directors is also directed to hand over all user IDs and passwords relating to the corporate debtor, particularly for government portals, for various compliances.
The IRP/RP is also directed to make a specific mention of non-compliance, if any, in this regard in his status report filed before this Adjudicating Authority immediately after a month of the initiation of the CIRP.
The IRP/RP is directed to approach the Government Departments, Banks, Corporate Bodies and other entities with requests for information/documents available with those authorities'/institutions/ others pertaining to the Corporate Debtor which would be relevant in the CIR proceedings.
The IRP/RP is directed to approach all the concerned Government Departments and authorities as discernible from the books of account of the Corporate Debtor requesting them to file claims if any amount is outstanding against the Corporate Debtor.
The Government Departments, Banks, Corporate Bodies and other entities are directed to render the necessary information and cooperation to the IRP/RP to enable him to conduct the CIR Proceedings as per law.
The IRP/RP shall collate the data obtained from (a) the claim(s) made before it and (b) information gathered from the records including those maintained by the Corporate Debtor.
The IRP/RP is further directed to send regular progress reports to this Tribunal every month.
We direct the Operational Creditor to deposit a sum of Rs.1,00,000/- with the Interim Resolution Professional, to meet out the expenses to perform the functions assigned to him in accordance with Regulation 6 of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Person) Regulations, 2016. The amount, however, is subject to adjustment by the Committee of Creditors as accounted for by the Interim Resolution Professional on the conclusion of CIRP.
A certified copy of the order shall be communicated to both the Applicant Operational Creditor and the Respondent Corporate Debtor. The learned counsel for the Applicant Operational Creditor shall deliver a certified copy of this order to the IRP forthwith. The Registry is also directed to send a certified copy of this order to the IRP at his e-mail address forthwith.
List CP (IB) No.62/ALD/2025 on 18.12.2025 for filing of the progress report/further proceeding.