# In the matter of Amit Narang vs. Aditya Birla Finance Limited & Ors.

> NCLAT judgment dated 2024-09-25. Citation: TCN-2024-NCLAT-00179. This is an appeal against the order dated 28.03.2024 passed by the Adjudicating Authority,…

- **Court:** NCLAT
- **Order date:** 25 Sept 2024
- **Citation:** TCN-2024-NCLAT-00179
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/amit-narang-vs-aditya-birla-finance-limited-ors-e3dc17dd

## Summary

### Background

This is an appeal against the order dated 28.03.2024 passed by the Adjudicating Authority, National Company Law Tribunal, Mumbai Bench-IV, admitting a Section 7 application filed by Aditya Birla Finance Limited (Respondent No. 1) against Narang Developers Private Limited (Corporate Debtor) under the Insolvency and Bankruptcy Code, 2016. The Corporate Debtor was admitted into Corporate Insolvency Resolution Process (CIRP). The appeal was preferred by the Ex-Director of the Corporate Debtor.

## Facts

Aditya Birla Finance Limited sanctioned a loan facility of Rs 11.50 Cr to Narang Developers Pvt. Ltd (NDPL), Csango Industries Pvt. Ltd. and Pacific Link Exports Pvt. Ltd. NDPL was a Co-Borrower and an MSME entity. The loan was subject to terms and conditions in Sanction letters dated 19.09.2016 and 04.12.2018, a Facility Agreement dated 29.09.2016, and a Supplementary Facility Agreement dated 07.12.2018. An Indenture of Mortgage was executed on 17.10.2016 by NDPL in favor of Aditya Birla Finance Limited. Due to default in repayment, the loan accounts were classified as NPA on 16.06.2019. A Demand Notice was issued on 05.07.2019 under Section 13(2) of the SARFAESI Act. NDPL made payments of Rs 30 lakhs and Rs 70 lakhs and offered to clear outstanding dues of Rs 2.38 Cr

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## Issues and analysis

### Issue 1: Whether the Appellant had a financial debt qua Respondent No.1 which had become due and payable and …

**Ratio:** A financial debt exists when there is a debt along with interest disbursed against the

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**Reasoning:** The NCLAT determined that the loan facility extended by Respondent No.1 was

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**Interpretation:** The interpretation of 'financial debt' under Section 5(8) of the IBC includes

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**Application:** In this case, the loan facility was extended by Respondent No.1 with a

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## Parties

- **Judges:** Ashok Bh…; Barun M…; +1 more
- **Appellants:** Amit Na…
- **Respondents:** Narang Developers…; ADITYA BIRLA…

## Timeline

- **2016-09-19 — Sanction Lett…**: Date of the Sanction…
- **2018-12-04 — Sanction Lett…**: Date of the Sanction…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 61 — Appeals and Appellate Authority](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-61)

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