# In the matter of Srisailan Krishnamurthy Vs Rahul Narayana Reddy & Anr.

> NCLAT judgment dated 2024-10-04. Citation: TCN-2024-NCLAT-00165. The appeal questions the propriety of the Impugned Order dated 2024-09-26, rendered in…

- **Court:** NCLAT
- **Order date:** 4 Oct 2024
- **Citation:** TCN-2024-NCLAT-00165
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/srisailan-krishnamurthy-vs-rahul-narayana-reddy-anr-b68fc2b7

## Summary

### Background

The appeal questions the propriety of the Impugned Order dated 2024-09-26, rendered in CP(IB)/164/BB/2022. The Adjudicating Authority admitted the application preferred under Section 7 of the I&B Code. The appellant argues that the parameters under Section 5(8) of the I&B Code for determining 'financial debt' are not satisfied, and the amount due cannot be considered a financial debt solely based on its reflection in the balance sheet. The appellant further argues that the interest component does not fall within the definition of debt or financial debt as defined under the I&B Code.

## Facts

The appellant, Srisailan Krishnamurthy, is contesting an Impugned Order dated 2024-09-26, which was rendered in CP(IB)/164/BB/2022. The Adjudicating Authority had admitted an application under Section 7 of the I&B Code. The appellant argues that the parameters for determining 'financial debt' under Section 5(8) of the I&B Code are not satisfied, and the amount due should not be considered a financial debt solely because it is reflected in the balance sheet. The appellant also argues that the interest component does not fall within the definition of debt or financial debt under the I&B Code. The respondent relies on email communications, but the appellant argues these should not be construed as an admission of debt without supporting evidence, even if the

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## Issues and analysis

### Issue 1: Whether the parameters as prescribed under Section 5 (8) of I & B Code for the purposes of …

**Ratio:** The definition of 'financial debt' under Section 5(8) of the I&B Code requires that

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**Reasoning:** The court is considering whether the debt meets the criteria to be classified as a

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**Interpretation:** Section 5(8) of the I&B Code defines 'financial debt' and sets out the

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**Application:** The court will need to determine whether the debt in question meets the

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## Parties

- **Judges:** Sharad Kumar…; Jatindranat…
- **Appellants:** Srisailan…
- **Respondents:** Rahul Narayana…
- **Advocates:** R. Mone…; A. Rit…; +4 more

## Timeline

- **2024-09-26 — Impugned Ord…**: Date of the Impugned Order…
- **2024-10-04 — Order Da…**: The date of the order…

## Legal provisions

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

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