# In the matter of Amit Rajput
Vs. M/s Reckon Industries Limited & Anr. Company Appeal (AT) (Insolvency) No. 215-216 of 2022

> NCLAT judgment dated 2022-07-04. Citation: TCN-2022-NCLAT-00398. This appeal challenges orders dated 07.02.2022 and 17.02.2022 by the National Company Law…

- **Court:** NCLAT
- **Order date:** 4 Jul 2022
- **Citation:** TCN-2022-NCLAT-00398
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/amit-rajput-vs-ms-reckon-industries-limited-anr-company-appeal-92eb70d9

## Summary

### Background

This appeal challenges orders dated 07.02.2022 and 17.02.2022 by the National Company Law Tribunal (NCLT), Jaipur Bench, which admitted an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC). The application was filed by the Respondent, a Financial Creditor. The appellant, a shareholder and suspended director of the Corporate Debtor, contests these orders. The dispute revolves around a financial transaction where the Financial Creditor disbursed Rs.3.5 crores to the Corporate Debtor, allegedly for acquiring a US company, M/s Sona BLW Precision Forge Inc. The Financial Creditor claims this was a financial debt, while the Corporate Debtor argues it was for equity shares.

## Facts

The Respondent No. 2 incorporated a company in USA being M/s Selma Precisions Technologies, NC, LLC on 22.11.2016 with the object of taking over a US Company namely M/s Sona BLW Precision Forge. Inc. A discussion took place between the Corporate Debtor and the Respondent No. 1 Financial Creditor for participating in the auction process of M/s Sona BLW Precision Forge Inc. The Corporate Debtor approached the Financial Creditor for the purpose of acquisition of M/s Sona BLW Precision Forge Inc. Corporate Debtor asked the Financial Creditor to extend 50% of total purchase price. The Financial Creditor was assured 50% equity share in the US Company for its financial assistance. The Corporate Debtor informed the Financial Creditor that the total expenses would be USD 11

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## Issues and analysis

### Issue 1: Whether amount of Rs.3.5 crore disbursed by the Financial Creditor to the Corporate Debtor between …

**Ratio:** Section 5(8) of the I&B Code defines 'financial debt' as a debt along with interest,

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**Reasoning:** The Adjudicating Authority considered the details of payments made by the Financial

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**Interpretation:** The court interpreted Section 5(8) of the I&B Code to include amounts

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**Application:** The court found that the Rs.3.5 crore was disbursed with the commercial effect

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## Parties

- **Judges:** Ashok Bh…; Shreesha…
- **Appellants:** Amit Ra…
- **Respondents:** Warm Forging Pvt.…; M/s. Reckon…
- **Advocates:** Majinder…; Shiv Mangal…; +8 more

## Timeline

- **2022-02-07 — Order by Adjudicating…**: Adjudicating Authority (National Company Law Tribunal), Jaipur Bench passed an order…
- **2022-02-17 — Order by Adjudicating…**: Adjudicating Authority (National Company Law Tribunal), Jaipur Bench passed an order in…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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