# In the matter of Darshan Gandhi Vs. USV Private Limited & Company Appeals (AT) (Ins.) No.644 of 2019
&I.A. Nos. 2106, 2660, 4316, 2609 & 2614 of 2019

> NCLAT judgment dated 2022-11-16. Citation: TCN-2022-NCLAT-00093. The case involves an appeal against the order dated 03.06.2019 passed by the National Company…

- **Court:** NCLAT
- **Order date:** 16 Nov 2022
- **Citation:** TCN-2022-NCLAT-00093
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/darshan-gandhi-vs-usv-private-limited-company-appeals-at-ins-no644-of-2019-ia-no-a9b2dbe5

## Summary

### Background

The case involves an appeal against the order dated 03.06.2019 passed by the National Company Law Tribunal (NCLT), Mumbai Bench, in C.P. (IB) No. 4135/I&B/MB/2018, which admitted an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC). The application was filed by USV Private Limited against Lok Housing and Constructions Ltd. (Corporate Debtor). The appellant, Darshan Gandhi, ex-Director of the Corporate Debtor, challenged the admission of the application, arguing that there was no financial debt, the application was barred by limitation, and principles of natural justice were violated. The case arises from intercorporate deposits made by Vipal Healthcare Pvt. Ltd. (VHPL) with the Corporate Debtor in 1996, which were later replaced by

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## Facts

In 1996, Vipal Healthcare Pvt. Ltd. (VHPL) placed two intercorporate deposits of Rs. 25 lakhs each, totaling Rs. 50 lakhs, with Lok Housing and Constructions Ltd. (Corporate Debtor). To secure repayment, the Corporate Debtor evolved a Short-Term Finance Refund Plan (STFR Plan). By 1997, the Corporate Debtor made a payment of Rs. 4,09,652. An oral understanding was reached between the Corporate Debtor, VHPL, and USV Private Limited (first Respondent), whereby USV would pay the Corporate Debtor an amount equivalent to the outstanding amount owed by the Corporate Debtor to VHPL. Based on this, USV placed Rs. 53,31,170 with the Corporate Debtor. The Corporate Debtor was declared an NPA in 2002. USV issued a notice under Section 433 read with Section 434 of the Companies

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## Issues and analysis

### Issue 1: Whether the debt claimed by USV Private Limited qualifies as a 'financial debt' under Section 5(8) …

**Ratio:** A 'financial debt' is defined under Section 5(8) of the IBC as a debt along with

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**Reasoning:** The NCLAT reasoned that the existence of a tripartite agreement between the Corporate

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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 NCLAT applied the ratio to the facts by noting that the debt

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## Parties

- **Judges:** Anant Bijay…; Shreesha…
- **Appellants:** DARSHAN G…
- **Respondents:** Lok Housing and…; USV Private…
- **Advocates:** Krishnendu…; Utsav Muk…; +11 more

## Timeline

- **1996-01-01 — Intercorporate Deposits…**: Vipal Healthcare Pvt. Ltd. (VHPL) placed two intercorporate deposits of Rs. 25 lakhs…
- **1997-01-01 — Partial Payment by…**: The Corporate Debtor made a…

## 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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