# In the matter of S. Chandriah
Vs.
Sunil Kumar Agarwal Company Appeal (AT) Insolvency No. 22 of 2022

> NCLAT judgment dated 2022-07-22. Citation: TCN-2022-NCLAT-00331. The case involves two appeals filed by S. Chandriah against orders passed by the National…

- **Court:** NCLAT
- **Order date:** 22 Jul 2022
- **Citation:** TCN-2022-NCLAT-00331
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/s-chandriah-vs-sunil-kumar-agarwal-company-appeal-a639c4c5

## Summary

### Background

The case involves two appeals filed by S. Chandriah against orders passed by the National Company Law Tribunal (NCLT), Ahmedabad Bench, related to the insolvency resolution process of Digjam Limited. Company Appeal (AT) Insolvency No. 22 of 2022 challenges the NCLT's order dated 07.02.2022, which rejected S. Chandriah's application (I.A. No. 658 of 2019) to be admitted as a financial creditor and a member of the Committee of Creditors (CoC). Company Appeal (AT) Insolvency No. 21 of 2022 challenges the NCLT's order dated 27.05.2020, which approved the resolution plan for Digjam Limited. S. Chandriah had offered to purchase surplus land from Digjam Limited and paid earnest money, but his claim to be a financial creditor was rejected, and the resolution plan was approved

…

## Facts

S. Chandriah, the appellant, offered to purchase surplus land from Digjam Limited, the corporate debtor, via a letter dated 2018-09-14. Subsequently, Chandriah paid Rs. 7 Crores as earnest money to Digjam Limited between 2018-09-26 and 2019-04-08. However, no formal agreement for the sale of land was executed. Meanwhile, Oman Inc. filed an application under Section 9 of the IBC against Digjam Limited, leading to the initiation of the Corporate Insolvency Resolution Process (CIRP). Chandriah filed claims as both an operational and financial creditor. The Resolution Professional (RP) classified Chandriah as 'other creditor'. Chandriah's application to be recognized as a financial creditor and a member of the CoC was rejected by the Adjudicating Authority (NCLT). The

…

## Issues and analysis

### Issue 1: Whether the payment of earnest money of Rs. 7 Crores by the Appellant to the Corporate Debtor …

**Ratio:** A 'financial debt' under Section 5(8) of the IBC means a debt along with interest, if

…

**Reasoning:** The disbursement made by the Appellant to the Corporate Debtor was only a payment of

…

**Interpretation:** The term 'time value of money' means the price received for the length of time

…

**Application:** In this case, the payment of earnest money was not a disbursement against the

…

## Parties

- **Judges:** Ashok Bh…; Naresh Sa…
- **Appellants:** S. Chan…
- **Respondents:** Digjam Li…; Sunil Kumar…

## Timeline

- **2018-09-14 — Letter of…**: The Appellant sent a letter to the Corporate Debtor (M/s. Digjam Limited) setting out his…
- **2018-09-26 — Payment of Earn…**: Subsequent to the sending letter dated 14.09.2018, the Appellant made payment of Earnest…

## Legal provisions

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

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclat-new-delhi/s-chandriah-vs-sunil-kumar-agarwal-company-appeal-a639c4c5