# In the matter of Abhay Kumar Jain Vs. Shree Siyaram Automations Pvt. Ltd. & Anr.

> NCLAT judgment dated 2018-07-30. Citation: TCN-2018-NCLAT-00179. The appeal was filed against an order dated March 13, 2018, passed by the Adjudicating…

- **Court:** NCLAT
- **Order date:** 30 Jul 2018
- **Citation:** TCN-2018-NCLAT-00179
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/abhay-kumar-jain-vs-shree-siyaram-automations-pvt-ltd-anr-3b917690

## Summary

### Background

The appeal was filed against an order dated March 13, 2018, passed by the Adjudicating Authority (National Company Law Tribunal), Special Bench, New Delhi, in CP No.(IB)-512(ND)/2017. The Adjudicating Authority had admitted an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, filed by the Respondent against ‘M/s Shree Siyaram Automations Pvt. Ltd.’, initiated moratorium, and appointed an Interim Resolution Professional.

## Facts

The Appellant filed an appeal against the Adjudicating Authority's order, which admitted an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, filed by the Respondent. The Corporate Debtor invested Rs. 80 crore, while the Respondent invested Rs. 90 lakh for purchasing land. The Appellant argued that the Respondent does not qualify as a ‘Financial Creditor’ under Section 5(7)&(8) of the I&B Code. The Respondent claimed to be a ‘Financial Creditor’ due to investing money for the time value of money. Interest was payable on the Respondent's investment, and a sum of Rs. 9 lakh was defaulted. The interest payment of Rs. 6,62,030/- was received on 06.05.2015 after TDS deduction. The Adjudicating Authority dealt with these facts in detail.

## Issues and analysis

### Issue 1: Whether the Respondent qualifies as a ‘Financial Creditor’ as defined under Section 5(7) read with …

**Ratio:** The legal principle applied is the definition of ‘Financial Creditor’ under Section 5(7)

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**Reasoning:** The court reasoned that the Respondent disbursed the amount against the consideration for

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**Interpretation:** The interpretation of Section 5(7) and (8) of the I&B Code is crucial. The

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**Application:** In this specific case, the Respondent invested Rs. 90 lakh, and the interest

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## Parties

- **Judges:** S.J. Mukhop…; Bansi Lal…
- **Appellants:** Abhay Kuma…
- **Respondents:** Shree Siyaram…

## Timeline

- **2018-03-13 — Order by Adjudicating…**: The Adjudicating Authority (National Company Law Tribunal), Special Bench, New Delhi,…
- **2015-05-06 — Interest Payment…**: The Respondent received an interest payment…

## 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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