# In the matter of Netafirm Agricultural Financing Agency Pvt. Ltd. vs. Baliraja Sakhar Karkhana Ltd. Company Appeal (AT) (Insolvency) No.408 of 2023

> NCLAT judgment dated 2023-05-03. Citation: TCN-2023-NCLAT-00556. The appeal was filed against an order dated 2022-11-23, where an application under Section 7…

- **Court:** NCLAT
- **Order date:** 3 May 2023
- **Citation:** TCN-2023-NCLAT-00556
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/netafirm-agricultural-financing-agency-pvt-ltd-vs-baliraja-sakhar-karkhana-ltd-c-01f97fe5

## Summary

### Background

The appeal was filed against an order dated 2022-11-23, where an application under Section 7 of the IBC was rejected because it did not meet the threshold of Rs. 1 Crore. The appellant challenged the order, stating that the total debt claimed in the application under Section 7 was Rs. 1,33,68,915, which included interest. The appellant argued that the Deed of Guarantee contemplated interest, which should be considered when computing the total debt. The Adjudicating Authority only considered the principal amount and held that the application did not meet the threshold.

## Facts

Netafirm Agricultural Financing Agency Pvt. Ltd. filed an appeal against the order dated 2022-11-23, passed by the Adjudicating Authority, which rejected their application under Section 7 of the Insolvency and Bankruptcy Code (IBC) on the ground that it did not meet the threshold limit of Rs. 1 Crore. Netafirm claimed that the total debt, including interest, was Rs. 1,33,68,915, exceeding the threshold. The Adjudicating Authority only considered the principal amount. Baliraja Sakhar Karkhana Ltd. is the respondent. The appellant argued that the Deed of Guarantee contemplated interest, which should be included in the total debt calculation. The respondent raised other issues, including limitation. The court noted that the copy of the application under Section 7

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority erred in rejecting the application under Section 7 of the IBC …

**Ratio:** The Adjudicating Authority committed an error in rejecting the application under Section

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**Reasoning:** The court reasoned that the total debt, including both the principal amount and the

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**Interpretation:** This clarifies that the threshold for initiating insolvency proceedings under

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**Application:** The court applied this principle to the facts of the case, noting that the

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## Parties

- **Judges:** Ashok Bh…; Barun M…
- **Appellants:** Netafirm Agricultu…
- **Respondents:** Baliraja Sakhar…
- **Advocates:** Gaurav Chapalgaonk…; Mitr…; +6 more

## Timeline

- **2022-11-23 — Order by Adjudicating…**: The Adjudicating Authority passed an order rejecting the application filed under Section…
- **2023-01-06 — Order Upl…**: The order was uploaded…

## 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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