# In the matter of Niyati Chemicals Vs. Minepro Minerals Pvt. Ltd. CA(AT)(Ins)No. 861 of 2020

> NCLAT judgment dated 2020-10-08. Citation: TCN-2020-NCLAT-00092. The appellant, Niyati Chemicals, filed an appeal against the order of the Adjudicating…

- **Court:** NCLAT
- **Order date:** 8 Oct 2020
- **Citation:** TCN-2020-NCLAT-00092
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/niyati-chemicals-vs-minepro-minerals-pvt-ltd-ca-735ee5b3

## Summary

### Background

The appellant, Niyati Chemicals, filed an appeal against the order of the Adjudicating Authority, which did not consider them as a Financial Creditor under the I&B Code, 2016. The appellant claimed to have extended an unsecured loan to the respondent, Minepro Minerals Pvt. Ltd., and also purchased powder from them, adjusting the amount from the loan. The appellant argued that they should be considered a financial creditor based on these transactions.

## Facts

Niyati Chemicals (Appellant) filed an appeal because they were not considered a Financial Creditor under the I&B Code, 2016. The Adjudicating Authority's order was dated 28.07.2020. Niyati Chemicals claimed to have extended an unsecured loan of Rs. 20 lacs to Minepro Minerals Pvt. Ltd. (Respondent) on 25.04.2017. They also purchased powder worth Rs. 2,88,400/- from the Respondent on 21.06.2017, adjusting this amount from the loan. Niyati Chemicals purchased 360 MTS of powder from the Respondent for export to Dubai. They also provided a further unsecured loan of Rs. 2,50,000/- on 23.06.2017, which was repaid on 28.06.2017. The core issue is whether these transactions qualify as a 'Financial Debt' under the I&B Code, allowing Niyati Chemicals to initiate

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## Issues and analysis

### Issue 1: Whether the transactions between the Appellant and the Respondent constitute a 'Financial Debt' …

**Ratio:** The 'Financial Debt' means a 'Debt' along with interest, if any, which is disbursed

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**Reasoning:** The court reasoned that the transactions were commercial advances for the supply of

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**Interpretation:** The court interpreted Section 5(8) of the I&B Code to mean that a financial

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**Application:** The court applied this interpretation to the facts, noting that the Appellant

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## Parties

- **Judges:** Bansi Lal…; Ashok Kumar…; +2 more
- **Appellants:** Niyati Che…
- **Respondents:** Minepro Minerals…

## Timeline

- **2020-07-28 — Order by Adjudicating…**: The Adjudicating Authority passed an order not considering the Appellant as a Financial…
- **2017-04-25 — Unsecured…**: Appellant extended an unsecured…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(8) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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