# In the matter of  National Agriculture Cooperative Marketing Federation Ltd. Vs. Synergy Petro Products Pvt. Ltd. Company Appeal (AT)(Ins) No. 862 of 2021

> NCLAT judgment dated 2022-10-11. Citation: TCN-2022-NCLAT-00168. The appeal was filed under Section 61(1) of the Insolvency and Bankruptcy Code, 2016 (IBC) by…

- **Court:** NCLAT
- **Order date:** 11 Oct 2022
- **Citation:** TCN-2022-NCLAT-00168
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/national-agriculture-cooperative-marketing-federation-ltd-vs-synergy-petro-produ-6de3864c

## Summary

### Background

The appeal was filed under Section 61(1) of the Insolvency and Bankruptcy Code, 2016 (IBC) by National Agriculture Cooperative Marketing Federation Limited (NAFED) against an order dated 31.05.2021 passed by the Adjudicating Authority (National Company Law Tribunal, Principal Bench, New Delhi) in C.P. (IB) No. 1106(PB)/2020. NAFED had filed an application under Section 7 of the IBC for initiation of Corporate Insolvency Resolution Process (CIRP) against Synergy Petro Products Private Limited, the Corporate Debtor, based on a default in repaying an Arbitral Award dated 10.07.2019. The Adjudicating Authority dismissed NAFED's application, leading to the present appeal.

## Facts

National Agriculture Cooperative Marketing Federation Limited (NAFED) and Synergy Petro Products Private Limited entered into a leave and license agreement dated 17.08.2005, later substituted by an agreement dated 03.07.2006, for a property owned by NAFED. Synergy Petro Products Private Limited was to pay a monthly license fee. Synergy Petro Products Private Limited defaulted on payments from April 2007 onwards. An arbitral dispute arose, culminating in an Arbitral Award dated 10.07.2019, ordering Synergy Petro Products Private Limited to pay Rs. 55,37,797/- plus interest. Despite the award, Synergy Petro Products Private Limited failed to make the payment. NAFED filed an application under Section 7 of the IBC to initiate CIRP, claiming to be a financial creditor based

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## Issues and analysis

### Issue 1: Whether the debt arising from the Arbitral Award, related to unpaid license fees under a leave and …

**Ratio:** The ratio is that a debt qualifies as a 'financial debt' under Section 5(8) of the IBC

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**Reasoning:** The court reasoned that the definition of 'financial debt' under Section 5(8) requires a

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**Interpretation:** The interpretation of Section 5(8) of the IBC is central to this issue. The

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**Application:** In this specific case, the court applied the ratio and reasoning to the facts,

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## Parties

- **Judges:** Anant Bijay…; Kanthi Na…; +1 more
- **Appellants:** National Agricultu…
- **Respondents:** Synergy Petro…

## Timeline

- **2005-08-17 — Leave and License…**: Initial leave and license agreement executed between NAFED and Synergy Petro Products…
- **2006-07-03 — Substituted A…**: The initial leave and license agreement…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 61(1) — Appeals and Appellate Authority](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-61)

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