# In the matter of Sree Bhadra Parks and Resorts Ltd. Vs. Sri Ramani Resorts and hotels Pvt. Ltd Company Appeal (AT) (CH) (INS) No. 95 of 2021

> NCLAT judgment dated 2021-09-06. Citation: TCN-2021-NCLAT-00108. The case involves an appeal against the order dated 30.03.2021 passed by the Adjudicating…

- **Court:** NCLAT
- **Order date:** 6 Sept 2021
- **Citation:** TCN-2021-NCLAT-00108
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/sree-bhadra-parks-and-resorts-ltd-vs-sri-ramani-resorts-and-hotels-pvt-ltd-compa-04bd1cec

## Summary

### Background

The case involves an appeal against the order dated 30.03.2021 passed by the Adjudicating Authority (National Company Law Tribunal, Kochi Bench) in IBA/13/KOB/2020, which admitted an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, for initiating Corporate Insolvency Resolution Process (CIRP) against Sree Bhadra Parks and Resorts Ltd. The appeal was filed by Sree Bhadra Parks and Resorts Ltd., contending that the respondent, Sri Ramani Resorts and hotels Pvt. Ltd, is neither a financial creditor nor an operational creditor. The appellant argued that there was no 'financial debt' as defined under the I&B Code, as the amount advanced was towards a 'Share Purchase Agreement' without any contemplation of return or time value of money. The

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## Facts

1. Sree Bhadra Parks and Resorts Ltd. (Appellant/Corporate Debtor) entered into a 'Share Purchase Agreement' with Sri Ramani Resorts and hotels Pvt. Ltd. (Respondent/Financial Creditor) for the purchase of 100% shares of the former.
2. Sri Ramani Resorts and hotels Pvt. Ltd. paid an advance of Rs. 1,00,00,000/- to Sree Bhadra Parks and Resorts Ltd. on 21.11.2012.
3. Due to encumbrances on the properties and assets of Sree Bhadra Parks and Resorts Ltd., the 'Share Purchase Agreement' could not be completed.
4. An 'Addendum' was entered into between the parties, wherein Sree Bhadra Parks and Resorts Ltd. instructed Sri Ramani Resorts and hotels Pvt. Ltd. to pay part of the consideration to its other creditors directly.
5. Sree Bhadra Parks and Resorts Ltd. acknowledged the

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## Issues and analysis

### Issue 1: Whether the advance payment made under the 'Share Purchase Agreement' constitutes a 'financial …

**Ratio:** The essential elements of a 'financial debt' under Section 5(8) of the I&B Code are

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**Reasoning:** The court considered the arguments of both parties and examined the terms of the 'Share

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**Interpretation:** The court interpreted Section 5(8) of the I&B Code to mean that a

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**Application:** In this case, the court found that the advance payment made by the 'Respondent'

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## Parties

- **Judges:** M. Venu…; V. P. S…
- **Appellants:** K. N. Namboothirip…
- **Respondents:** Sree Bhadra Parks…; Ramani Resorts…
- **Advocates:** Anil D…; P.H. Arvindh…; +1 more

## Timeline

- **2012-11-21 — Share Purchase…**: Sree Bhadra Parks and Resorts Ltd. entered into a 'Share Purchase Agreement' with Sri…
- **2012-11-21 — Advance P…**: Sri Ramani Resorts and hotels Pvt. Ltd. paid an advance of Rs. 1,00,00,000/- to Sree…

## 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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