# In the matter of Raj Radhe Finance Ltd. vs. Pegasus Assets Reconstruction Pvt. Ltd. & Ors.

> NCLAT judgment dated 2025-03-11. Citation: TCN-2025-NCLAT-00170. The case involves an appeal against an order passed by the NCLT, Mumbai Bench, regarding I.A.…

- **Court:** NCLAT
- **Order date:** 11 Mar 2025
- **Citation:** TCN-2025-NCLAT-00170
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/raj-radhe-finance-ltd-vs-pegasus-assets-reconstruction-pvt-ltd-ors-a73f5ba3

## Summary

### Background

The case involves an appeal against an order passed by the NCLT, Mumbai Bench, regarding I.A. No. 590/2025 filed by a member of the CoC. The application was allowed, directing HDFC Bank to reissue a demand draft for Rs. 2.18 Cr. The appellant, Raj Radhe Finance Ltd., a NBFC, had sanctioned financial assistance to the SRA (Pegasus Assets Reconstruction Pvt. Ltd.) for the CIRP of the Corporate Debtor, K & K Foundry Private Limited. A demand draft was issued in favor of 'Pegasus Group Twenty-Eight Trust 4' and later reissued in the name of the Corporate Debtor. Disputes arose regarding the revalidation of the demand draft, leading to the current appeal.

## Facts

Raj Radhe Finance Ltd. (Appellant), an NBFC, sanctioned a loan of Rs. 5 Crore to Pegasus Assets Reconstruction Pvt. Ltd. (SRA, Respondent No. 2) to facilitate payments in the CIRP of K & K Foundry Private Limited (Corporate Debtor). Rs. 2.94 Crore was disbursed via a demand draft in favor of 'Pegasus Group Twenty-Eight Trust 4'. The demand draft was later reissued in the name of the Corporate Debtor at the SRA's request, with an expiry date of 27.11.2024. The SRA approached the Appellant for financing to enable payment as per the Resolution Plan. The Appellant recalled the loan on 07.12.2024. A member of the CoC filed I.A. No. 590/2025 seeking a direction to HDFC Bank to revalidate the demand draft. The Adjudicating Authority (NCLT) allowed the application,

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority erred in directing HDFC Bank to reissue the demand draft without …

**Ratio:** When a financier disburses funds under a loan agreement, the disbursed amount becomes the

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**Reasoning:** The court reasoned that once Raj Radhe Finance Ltd. disbursed the loan amount to Pegasus

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**Interpretation:** This legal issue concerns the ownership and control of funds disbursed under a

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**Application:** In this case, the court applied the ratio to the facts by stating that once the

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## Parties

- **Judges:** Ashok Bh…; Arun Ba…
- **Appellants:** Raj Radhe Finance…
- **Respondents:** K & K Foundry…; Pegasus Assets…

## Timeline

- **2024-07-24 — Loan San…**: Raj Radhe Finance Ltd. sanctioned a loan of Rs. 5 Crore to Pegasus Assets Reconstruction…
- **2024-07-24 — Loan Agre…**: Raj Radhe Finance Ltd. and Pegasus Assets Reconstruction Pvt. Ltd. entered into a Loan…

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