# In the matter of Jag Mohan Daga vs. Bimal Kanti Chowdhary & Ors. Company Appeal (AT) (Insolvency) No. 848 of 2022

> NCLAT judgment dated 2022-10-31. Citation: TCN-2022-NCLAT-00134. The appeal challenges an order by the Adjudicating Authority admitting an application under…

- **Court:** NCLAT
- **Order date:** 31 Oct 2022
- **Citation:** TCN-2022-NCLAT-00134
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/jag-mohan-daga-vs-bimal-kanti-chowdhary-ors-company-appeal-4cffd957

## Summary

### Background

The appeal challenges an order by the Adjudicating Authority admitting an application under Section 7 of the IBC, 2016, for a debt of Rs. 15,89,632/-. The appellant contends that the application is not maintainable, time-barred, and initiated due to a family dispute rather than genuine insolvency resolution.

## Facts

The Financial Creditor, Smt. Vrinda Karnani, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against the Corporate Debtor, Vindhya Industries Pvt. Ltd., for a debt of Rs. 15,89,632/-, including interest up to August 31, 2019. The Adjudicating Authority (NCLT, Kolkata Bench) admitted this application via an order dated July 14, 2022, which the Corporate Debtor subsequently appealed. The Financial Creditor claimed a disbursement of Rs. 20,00,000/- to Mining and Engineering Corporation, a proprietary concern of the Corporate Debtor, in 2009, under a family arrangement. Payments towards interest were allegedly made, but a default occurred on September 30, 2016. The Corporate Debtor argued that the application was not maintainable as the

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the IBC, 2016, was maintainable against the Corporate …

**Ratio:** A proprietorship and its proprietor are not separate legal entities, and the proprietor

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**Reasoning:** The Adjudicating Authority held that a proprietorship and its proprietor are not separate

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**Interpretation:** The court interpreted the relationship between a corporate debtor and its

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**Application:** This interpretation meant that the debt disbursed to the proprietary concern

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## Parties

- **Judges:** Ashok Bh…; Barun M…; +2 more
- **Appellants:** JAG MOHAN…
- **Respondents:** Vindhya Industries…; Bimal Kanti…; +1 more
- **Advocates:** For Appel…; Abhijeet…; +10 more

## Timeline

- **2009 — Disbursement…**: Financial Creditor disbursed Rs. 20,00,000/- to Mining and Engineering Corporation under…
- **August 31, 2019 — Debt calculat…**: Interest on the debt was calculated up to…

## 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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