# In the matter of Saumil A. Bhavnagri Vs. Messers Nimit Builders & Anr. CA(AT)(Ins)No. 710 of 2019

> NCLAT judgment dated 2019-11-21. Citation: TCN-2019-NCLAT-00092. The case involves an appeal against an order dated 14.06.2019 passed by the National Company…

- **Court:** NCLAT
- **Order date:** 21 Nov 2019
- **Citation:** TCN-2019-NCLAT-00092
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/saumil-a-bhavnagri-vs-messers-nimit-builders-anr-ca-6c8d187a

## Summary

### Background

The case involves an appeal against an order dated 14.06.2019 passed by the National Company Law Tribunal (NCLT), New Delhi Bench-III, which admitted an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) against Jeevan Jyoti Vanijya Limited (Corporate Debtor). The Corporate Debtor filed an application to recall the admission order, which was dismissed. The present appeal was filed by a shareholder of the Corporate Debtor, arguing that the Corporate Debtor is a non-banking finance company (NBFC) and thus excluded from the definition of 'Corporate Person' under Section 3(7) of the IBC.

## Facts

Saumil A. Bhavnagri filed an appeal against the order of NCLT. Nimit Builders Private Limited, the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Jeevan Jyoti Vanijya Limited, the Corporate Debtor, for default in repayment of a loan of Rs.3,00,00,000/- disbursed on 2nd May, 2017. The application was admitted on 15th January, 2019. The Corporate Debtor then filed an application to recall the order, claiming to be a non-banking finance company (NBFC) registered on 1st January, 2003. The Adjudicating Authority rejected the recall application. The Corporate Debtor argued that as an NBFC, it is excluded from the definition of 'Corporate Person' under Section 3(7) of the IBC. The Financial Creditor argued that

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor, being a Non-Banking Financial Company (NBFC), falls within the …

**Ratio:** The definition of 'Corporate Person' under Section 3(7) of the IBC specifically excludes

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**Reasoning:** The NCLAT relied on the definition of 'Corporate Person' under Section 3(7) of the IBC,

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**Interpretation:** The term 'corporate person' as defined in Section 3(7) of the IBC excludes

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**Application:** Since the Corporate Debtor demonstrated that it was a financial service

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## Parties

- **Judges:** A.I.S. C…; Kanthi Na…; +2 more
- **Appellants:** Saumil A.…
- **Respondents:** Messers Jeevan…; Messers Nimit…

## Timeline

- **2017-05-02 — Loan Disbur…**: Financial Creditor disbursed a loan of…
- **2017-08-12 — Notice S…**: Financial Creditor served a notice on the Corporate Debtor regarding the default in…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 3(7) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-3)

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