# In the matter of Abhishek Agarwal and Ors. Vs. Ms. Manasadevi Bakers Pvt. Ltd.  CA(AT)(Ins)No. 1012 of 2019

> NCLAT judgment dated 2020-06-08. Citation: TCN-2020-NCLAT-00238. The case involves an appeal against an order dated 22.08.2019 passed by the National Company…

- **Court:** NCLAT
- **Order date:** 8 Jun 2020
- **Citation:** TCN-2020-NCLAT-00238
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/abhishek-agarwal-and-ors-vs-ms-manasadevi-bakers-pvt-ltd-ca-124b5854

## Summary

### Background

The case involves an appeal against an order dated 22.08.2019 passed by the National Company Law Tribunal (NCLT), Hyderabad Bench, which rejected an application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC). The Appellants, claiming to be Financial Creditors, filed the application against Manasadevi Bakers Pvt. Ltd., the Corporate Debtor. The NCLT rejected the application based on findings related to the nature of the loan, a subordination agreement with Canara Bank, and internal disputes among the Corporate Debtor's directors.

## Facts

Abhishek Agarwal, Ashish Kumar Agarwal, and Neha Agarwal (the Appellants) claimed to be financial creditors of Manasadevi Bakers Pvt. Ltd. (the Corporate Debtor). They filed an application under Section 7 of the IBC before the NCLT, Hyderabad, seeking to initiate corporate insolvency resolution process (CIRP). The Appellants claimed to have disbursed an unsecured loan of Rs.66,75,000/- to the Corporate Debtor, reflected in the Corporate Debtor's financial statements from 2006-2007 to 2015-2016. They claimed that with interest, the amount due was Rs.1,47,881,477/-. The Corporate Debtor, through Vishnu Dutt Gupta and Ajay Kumar Agarwal, filed counter-claims, disputing the authorization of Vishnu Dutt Gupta and highlighting a subordination agreement with Canara Bank. The

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## Issues and analysis

### Issue 1: Whether the unsecured loan provided by the Appellants constitutes a 'financial debt' under the …

**Ratio:** A 'financial debt' requires consideration for the time value of money. If a loan is

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**Reasoning:** The Adjudicating Authority found that the unsecured loan was interest-free and that the

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**Interpretation:** The interpretation of 'financial debt' under the IBC requires a determination

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**Application:** In this case, the absence of interest and a fixed repayment schedule led the

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## Parties

- **Judges:** A.I.S. C…; A.B. S…; +2 more
- **Appellants:** Abhishek A…
- **Respondents:** Manasadevi Bakers…; M/s. Manasadevi…

## Timeline

- **2019-08-22 — Order by NCLT…**: Order passed by National Company Law Tribunal, Hyderabad Bench, Hyderabad in…
- **2016-06-10 — Demand N…**: Appellants sent Demand…

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