# In the matter of Jatin Mehta vs. Rushabh Civil Contractors Pvt. Ltd. Through: Debi Prasanna Sarangi, IRP & Anr.

> NCLAT judgment dated 2024-10-29. Citation: TCN-2024-NCLAT-00135. This case involves an appeal against the order dated 26.07.2024 passed by the Adjudicating…

- **Court:** NCLAT
- **Order date:** 29 Oct 2024
- **Citation:** TCN-2024-NCLAT-00135
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/jatin-mehta-vs-rushabh-civil-contractors-pvt-ltd-through-debi-prasanna-sarangi-i-0abc2cc3

## Summary

### Background

This case involves an appeal against the order dated 26.07.2024 passed by the Adjudicating Authority (National Company Law Tribunal), Mumbai Bench, Court-I, which admitted a Section 7 application filed by the Financial Creditor through the Interim Resolution Professional (IRP). The appeal was filed by a Suspended Director of the Corporate Debtor challenging the admission of the Section 7 application. The Financial Creditor, Rushabh Civil Contractors Private Limited, had disbursed an amount of Rs.3.50 Crores to the Corporate Debtor on 16.12.2016. The Corporate Debtor booked interest and TDS in its ledger. The IRP, after examining the Corporate Debtor's books, found that Rs.4,85,46,862/- was due as of 31.03.2020. A notice was issued on 29.11.2022 demanding

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## Facts

Rushabh Civil Contractors Private Limited (Financial Creditor) disbursed Rs.3.50 Crores to an unnamed Corporate Debtor on 2016-12-16. The Corporate Debtor booked interest and TDS on this amount. On 2022-06-27, NCLT Mumbai admitted a Section 7 application against the Financial Creditor. The IRP found Rs.4,85,46,862/- due from the Corporate Debtor as of 2020-03-31. A demand notice was issued on 2022-11-29 for Rs.4,74,48,109/-, which was ignored. The Financial Creditor filed CP(IB) No.244 of 2023 claiming Rs.9,56,83,836/- outstanding as of 2022-03-31, with a default date of 2022-07-12. The Corporate Debtor argued the debt was not proven and was time-barred, citing a letter from 2020-08-20 promising repayment by 2020-12-01, failing which two residential units would be

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## Issues and analysis

### Issue 1: Whether the amount claimed by the Applicant …

**Ratio:** A financial debt exists when there is a debt along with interest, evidenced by records

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**Reasoning:** The court observed that the ledger of the corporate debtor and the financial creditor

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**Interpretation:** The presence of interest payments and a clear admission of the loan in writing

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**Application:** The court found that the ledgers and the letter dated 20.08.2020 established

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## Parties

- **Judges:** Ashok Bh…; Arun Ba…
- **Appellants:** Jatin M…
- **Respondents:** Rushabh Civil…
- **Advocates:** Debi Prasanna…; Kunal T…; +7 more

## Timeline

- **2016-12-16 — Loan Disbur…**: Rushabh Civil Contractors Private Limited disbursed Rs.3.50 Crores to the Corporate…
- **2022-06-27 — NCLT Admits Section 7…**: NCLT Mumbai admitted Section 7…

## 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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