# In the matter of Anita Jindal vs. Jindal Buildtech Pvt. Ltd. Company Appeal (AT) (Insolvency) No. 512 of 2021

> NCLAT judgment dated 2022-08-04. Citation: TCN-2022-NCLAT-00305. This case involves an appeal against the order dated 26.03.2021 passed by the National…

- **Court:** NCLAT
- **Order date:** 4 Aug 2022
- **Citation:** TCN-2022-NCLAT-00305
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/anita-jindal-vs-jindal-buildtech-pvt-ltd-company-appeal-5b6e6169

## Summary

### Background

This case involves an appeal against the order dated 26.03.2021 passed by the National Company Law Tribunal (NCLT), Chandigarh Bench, which admitted a Section 7 application under the Insolvency and Bankruptcy Code, 2016 (IBC). The appellant, Anita Jindal, is the Shareholder and Ex-Director of the Corporate Debtor, M/s Jindal Buildtech Pvt. Ltd. The appeal challenges the admission of the insolvency application filed by the second respondent, Vinay Yadav, who claimed to be a Financial Creditor. The appellant argues that the money in question was never advanced to the Corporate Debtor as financial debt, but was intended for opening joint depots. The NCLT admitted the Section 7 application based on dishonored cheques and bank statements indicating a default in repayment.

## Facts

Anita Jindal, the Shareholder and Ex-Director of M/s Jindal Buildtech Pvt. Ltd. (Corporate Debtor), appealed against the NCLT's order admitting a Section 7 application filed by Vinay Yadav (Respondent No. 2), who claimed to be a Financial Creditor. The alleged financial debt was based on dishonored cheques amounting to Rs. 87,50,000/- issued by the Corporate Debtor. The Appellant contended that the money was not a financial debt but was intended for opening joint depots. The Corporate Debtor had already paid Rs. 67,90,000/- to the Respondent No. 2 in proceedings under Section 138 of the NI Act, and the Respondent No. 2 had accepted interest at 6% per annum in those proceedings. The Appellant argued that the Respondent No. 2 was now claiming 18% interest and that the

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## Issues and analysis

### Issue 1: Whether the NCLT was justified in admitting the Section 7 application under the Insolvency and …

**Ratio:** The IBC is intended for the resolution of insolvency and not merely for debt recovery.

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**Reasoning:** The tribunal reasoned that the IBC's preamble emphasizes 'reorganization' and 'insolvency

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**Interpretation:** The IBC should not be used as a substitute for debt recovery procedures,

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**Application:** In this case, the tribunal found that the initiation of CIRP was primarily for

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## Parties

- **Judges:** Anant Bijay…; Shreesha…
- **Appellants:** Anita J…
- **Respondents:** Jindal Buildtech…; M/S JINDAL…

## Timeline

- **2015-12-01 — Loan Disb…**: Rs.97,00,000/- was lent to the ‘Corporate Debtor' as ‘Short-Term Loan’ in December 2015,…
- **2016-05-11 — Part Pay…**: Rs.9,50,000/- was paid…

## 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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