# In the matter of Pawan Kumar Vs. Utsav Securities Pvt. Ltd. & Anr. Company Appeal (AT) (Ins) No. 251 of 2020

> NCLAT judgment dated 2021-08-03. Citation: TCN-2021-NCLAT-00156. The appeal was filed by Pawan Kumar, ex-director of Vogue Clothiers Pvt. Ltd., against the…

- **Court:** NCLAT
- **Order date:** 3 Aug 2021
- **Citation:** TCN-2021-NCLAT-00156
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/pawan-kumar-vs-utsav-securities-pvt-ltd-anr-company-appeal-926ae8a9

## Summary

### Background

The appeal was filed by Pawan Kumar, ex-director of Vogue Clothiers Pvt. Ltd., against the order dated 30.01.2020 passed by the Adjudicating Authority (National Company Law Tribunal, New Delhi Bench) in CP (IB) No. 1593/(ND)/2019, which admitted the Financial Creditor's application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) and initiated Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. The Financial Creditor, Utsav Securities Pvt. Ltd., a Non-Banking Finance Company, had granted financial assistance to the Corporate Debtor. The Corporate Debtor failed to pay interest after making a partial payment, leading the Financial Creditor to recall the loan and file an application under Section 7 of the IBC.

## Facts

Pawan Kumar, the ex-director of Vogue Clothiers Pvt. Ltd., filed an appeal against the order of the Adjudicating Authority (NCLT, New Delhi Bench) which initiated CIRP against Vogue Clothiers based on an application by Utsav Securities Pvt. Ltd., a Non-Banking Finance Company (NBFC). Utsav Securities had provided financial assistance of Rs. 6.10 Cr to Vogue Clothiers between 16.02.2017 and 22.02.2017. Vogue Clothiers paid interest of Rs. 6,05,718 on 14.02.2018 after TDS deduction but subsequently failed to pay further interest. Utsav Securities recalled the loan on 27.04.2019 and filed an application under Section 7 of the IBC. Vogue Clothiers resisted the application, arguing the absence of a contractual agreement, an undefined loan period, and the lack of a specific

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## Issues and analysis

### Issue 1: Whether the transaction in …

**Ratio:** The ratio is based on the interpretation of Section 5(7), Section 5(8), and Section 7 of

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**Reasoning:** The court reasoned that the Financial Creditor failed to provide sufficient evidence to

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**Interpretation:** The interpretation focuses on the definition of 'Financial Debt' under the IBC

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**Application:** The ratio and reasoning were applied to the specific facts of the case, where

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## Parties

- **Judges:** Jarat Kuma…; Ashok Kumar…
- **Appellants:** Pawan K…
- **Respondents:** Vogue Clothiers…; Utsav Securities…
- **Advocates:** Aman Bh…; Vivek S…; +6 more

## Timeline

- **2020-01-30 — Order by Adjudicating…**: The Adjudicating Authority (National Company Law Tribunal, New Delhi Bench) passed an…
- **2017-02-16 — Financial Ass…**: Financial Creditor transferred Rs. 6.10 Crs. through RTGS between 16.02.2017 to…

## 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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