# In the matter of 9M Corporation Vs. Naresh Verma and Ors. CA (AT) (Ins) No. 45 of 2021

> NCLAT judgment dated 2021-07-13. Citation: TCN-2021-NCLAT-00190. This appeal was filed by 9M Corporation against an order passed by the Adjudicating…

- **Court:** NCLAT
- **Order date:** 13 Jul 2021
- **Citation:** TCN-2021-NCLAT-00190
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/9m-corporation-vs-naresh-verma-and-ors-ca-a1061188

## Summary

### Background

This appeal was filed by 9M Corporation against an order passed by the Adjudicating Authority/National Company Law Tribunal, Jaipur Bench, regarding the constitution of the Committee of Creditors (CoC) in the Corporate Insolvency Resolution Process (CIRP) of Bohra Pratisthan Private Limited (BPPL). The appellant challenged the inclusion of STCI Finance Limited as a financial creditor in the CoC, arguing that STCI Finance Ltd.'s claim was based on a corporate guarantee provided by BPPL for a loan to Bohra Industries Limited (BIL), and not a direct disbursal to BPPL. The appellant contended that STCI Finance Ltd. should not be considered a financial creditor under Section 5(7) and 5(8) of the Insolvency and Bankruptcy Code (IBC).

## Facts

9M Corporation, a proprietorship concern, filed an application under Section 7 of the IBC against Bohra Pratisthan Private Limited (BPPL), the Corporate Debtor. The application was admitted, and a Committee of Creditors (CoC) was constituted. 9M Corporation held 6.11% of the voting share in the CoC. STCI Finance Limited, Respondent No. 2, filed a claim based on a debtor-creditor relationship arising from a guarantee given by BPPL for a loan of Rs. 24 crores sanctioned by STCI Finance Ltd. to Bohra Industries Limited (BIL), a group concern of BPPL. STCI Finance Limited held 75.90% of the voting share in the CoC. Phosphate India Private Limited, Respondent No. 3, held 17.99% of the voting share in the CoC. The Appellant challenged the inclusion of STCI Finance Limited as

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## Issues and analysis

### Issue 1: Whether STCI Finance Ltd. qualifies as a financial creditor of Bohra Pratisthan Private Limited …

**Ratio:** The legal principle applied is that for a debt to be considered a 'financial debt' under

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**Reasoning:** The court reasoned that the Anuj Jain judgment, which emphasizes the requirement of

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**Interpretation:** The interpretation of Section 5(8) of the IBC is crucial. The court interpreted

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**Application:** The court applied the ratio to the facts of the case, noting that BPPL provided

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## Parties

- **Judges:** A.I.S. C…; Alok Sriv…
- **Appellants:** 9M Corpor…
- **Respondents:** Bohra Pratisthan…; NARESH…

## Timeline

- **2019-01-01 — CP(IB) No. 171…**: Proceedings initiated before the National…
- **2019-08-05 — Order of Ad…**: Order of admission passed on the Section 7 application filed by the Appellant against the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(7) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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