# In the matter of Rahul H. Mehta vs. Gajendra Investment Ltd. & Ors.

> NCLAT judgment dated 2024-10-15. Citation: TCN-2024-NCLAT-00157. The appeal was filed by the ex-Director of the Corporate Debtor against an order of the…

- **Court:** NCLAT
- **Order date:** 15 Oct 2024
- **Citation:** TCN-2024-NCLAT-00157
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/rahul-h-mehta-vs-gajendra-investment-ltd-ors-5a8ab938

## Summary

### Background

The appeal was filed by the ex-Director of the Corporate Debtor against an order of the Adjudicating Authority (NCLT, Mumbai Bench-I) which admitted a Section 7 application filed by the Financial Creditor, Gajendra Investment Ltd., for initiating Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, Rushabh Civil Contractors Pvt. Ltd., due to non-payment of debt.

## Facts

Gajendra Investment Ltd. (GIL), the Financial Creditor, filed a Section 7 application under the Insolvency and Bankruptcy Code 2016 (IBC) against Rushabh Civil Contractors Pvt. Ltd. (Rushabh), the Corporate Debtor, seeking to initiate the Corporate Insolvency Resolution Process (CIRP). The application was based on the Corporate Debtor's failure to repay an amount of Rs 3.77 Cr. disbursed on September 14, 2016, and subsequent outstanding sums. The Adjudicating Authority (NCLT, Mumbai Bench-I) admitted the Section 7 application on June 27, 2022, finding a default of Rs 1.51 Cr. as of June 19, 2019. The ex-Director of the Corporate Debtor, Rahul H. Mehta, appealed this order, arguing that no financial contract existed, the debt amount was disputed due to varying interest

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## Issues and analysis

### Issue 1: Whether a financial contract is a sine qua non for establishing a financial debt under the …

**Ratio:** A written financial contract is not mandatory to prove the existence of a financial debt;

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**Reasoning:** The Tribunal referred to its previous judgment in Agarwal Polysacks Ltd. vs K. K. Agro

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**Interpretation:** Regulation 8(2) of IBBI (Insolvency Resolution Process for Corporate Persons)

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**Application:** The Corporate Debtor's balance sheet, confirmation of accounts, and TDS

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## Parties

- **Judges:** Ashok Bh…; Barun M…
- **Appellants:** Rahul H.…
- **Respondents:** Rushabh Civil…; Gajendra Investmen…; +1 more
- **Advocates:** For Appel…; Abhijeet Sinha…; +8 more

## Timeline

- **September 14, 2016 — Financial Ass…**: Gajendra Investment Ltd. provided Rs 3.77 Cr.…
- **April 15, 2017 — Confirmation of…**: Financial Creditor sent a communication to the Corporate Debtor seeking confirmation of…

## Legal provisions

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

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