# In the matter of Pravinbhai Raninga vs. The Kotak Resources & Ors.

> NCLAT judgment dated 2018-08-29. Citation: TCN-2018-NCLAT-00133. This case involves an appeal against an order dated 21.02.2017 passed by the Adjudicating…

- **Court:** NCLAT
- **Order date:** 29 Aug 2018
- **Citation:** TCN-2018-NCLAT-00133
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/pravinbhai-raninga-vs-the-kotak-resources-ors-372777d5

## Summary

### Background

This case involves an appeal against an order dated 21.02.2017 passed by the Adjudicating Authority (National Company Law Tribunal), Ahmedabad Bench, which admitted an insolvency petition under Section 7 of the Insolvency & Bankruptcy Code, 2016 (I&B Code) filed by The Kotak Resources against the Corporate Debtor, M/s Raninga Ispat Pvt Ltd. The appellant, Pravinbhai Raninga, challenged the order, arguing that the material produced by the respondent was insufficient to establish a default. The appellant claimed that the 'pledge agreement' was doubtful and that the Corporate Debtor had already paid the initial loan of Rs.50 lakhs. The respondent, on the other hand, contended that the amount lent to the appellant was a 'financial debt' under Section 5(8) of the

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## Facts

Pravinbhai Raninga (Appellant) appealed against an order admitting M/s Raninga Ispat Private Limited (Corporate Debtor) into insolvency based on an application by The Kotak Resources (Respondent) under Section 7 of the Insolvency & Bankruptcy Code, 2016. The Adjudicating Authority (NCLT), Ahmedabad, had admitted the petition. The appellant argued that the material presented by the respondent was insufficient to prove a default. The appellant questioned the validity of a 'pledge agreement' and claimed the initial loan of Rs.50 lakhs was already repaid. The respondent contended the amount lent was a financial debt under Section 5(8) of the I&B Code, supported by a tripartite agreement involving Kotak Resources, Navis, and the Corporate Debtor. The Corporate

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority was justified in admitting the insolvency petition under Section …

**Ratio:** The Adjudicating Authority must be satisfied that a default has occurred before admitting

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**Reasoning:** The court found inconsistencies in the dates and amounts claimed by the respondent,

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**Interpretation:** Section 7 of the I&B Code requires the Adjudicating Authority to ascertain

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**Application:** In this case, the court found that the 'Deed of Assignment' of Debt was

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## Parties

- **Judges:** S.J. Mukhop…; Bansi Lal…
- **Appellants:** Pravinbhai…
- **Respondents:** M/s. Raninga…; The Kotak…
- **Advocates:** Harin P…; Jayant…; +10 more

## Timeline

- **2017-02-21 — Order by Adjudicating…**: The Adjudicating Authority (National Company Law Tribunal), Ahmedabad Bench, passed an…
- **2017-10-25 — Deed of Assignment of…**: The 1st Respondent (financial creditor) relied on 'Deed of Assignment' of Debt dated 25th…

## 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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