# In the matter of Mr.Vipin Agarwal Vs. Mr. Satyapraksh Aggarwal & Ors. CA(AT)(Ins) No. 1480 of 2019

> NCLAT judgment dated 2020-01-06. Citation: TCN-2020-NCLAT-00578. The Respondent, Satyaprakash Agarwal (Financial Creditor), filed an application under Section…

- **Court:** NCLAT
- **Order date:** 6 Jan 2020
- **Citation:** TCN-2020-NCLAT-00578
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/mrvipin-agarwal-vs-mr-satyapraksh-aggarwal-ors-ca-59424fc0

## Summary

### Background

The Respondent, Satyaprakash Agarwal (Financial Creditor), filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Vistar Metal Industries Pvt. Ltd. The Adjudicating Authority (National Company Law Tribunal), Mumbai Bench, admitted the application via an order dated 14th October, 2019. The Appellant, Director, argued that no interest was payable, and the debt did not qualify as a ‘Financial Debt’ under Section 5(8) of the I&B Code. The Corporate Debtor's cheques to three Financial Creditors were dishonored, constituting a default.

## Facts

Satyaprakash Agarwal, the Respondent and Financial Creditor, initiated insolvency proceedings against Vistar Metal Industries Pvt. Ltd. under Section 7 of the Insolvency and Bankruptcy Code, 2016. The National Company Law Tribunal, Mumbai Bench, admitted the application on October 14, 2019. The Appellant, Director, argued that the debt did not qualify as a ‘Financial Debt’ under Section 5(8) of the I&B Code because no interest was payable. The Corporate Debtor's cheques to three Financial Creditors were dishonored, constituting a default. The Corporate Debtor had failed to honor its undertaking under Letters dated 15.12.2015 to make payments as per the schedule proposed and defaulted when the cheques were dishonoured. The Corporate Debtor had taken a loan, which

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## Issues and analysis

### Issue 1: Whether the debt in question qualifies as a ‘Financial Debt’ as defined under Section 5(8) of the …

**Ratio:** A financial debt is a debt along with interest, if any, which is disbursed against the

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**Reasoning:** The court considered the fact that the Corporate Debtor had taken a loan, which was

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**Interpretation:** Section 5(8) of the I&B Code defines ‘financial debt’ as a debt along with

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**Application:** The court applied the definition of ‘financial debt’ to the facts of the case,

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## Parties

- **Judges:** S.J. Mukhop…; Bansi Lal…
- **Appellants:** Vipin Ag…
- **Respondents:** Vistar Metal…; Satyaprakash…

## Timeline

- **2020-01-06 — Application…**: The Respondent Satyaprakash Agarwal filed an application under Section 7 of the…
- **2019-10-14 — Application A…**: The Adjudicating Authority (National Company Law Tribunal), Mumbai Bench, admitted the…

## 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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