# In the matter of VRG Healthcare Pvt. Ltd. vs. VRG Infrastructure Pvt. Ltd. Company Appeal (AT) (Insolvency) No. 778 of 2020

> NCLAT judgment dated 2023-03-22. Citation: TCN-2023-NCLAT-00658. This case involves an appeal against an order dated 20.03.2020 passed by the Adjudicating…

- **Court:** NCLAT
- **Order date:** 22 Mar 2023
- **Citation:** TCN-2023-NCLAT-00658
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/vrg-healthcare-pvt-ltd-vs-vrg-infrastructure-pvt-ltd-company-appeal-9c82420b

## Summary

### Background

This case involves an appeal against an order dated 20.03.2020 passed by the Adjudicating Authority (National Company Law Tribunal, Mumbai Bench) in a company petition (IB) 4186/MB/2019. The appellant, VRG Healthcare Pvt. Ltd., filed a petition under Section 7 of the Insolvency and Bankruptcy Code (IBC) to initiate the Corporate Insolvency Resolution Process (CIRP) against the respondent, VRG Infrastructure Pvt. Ltd. The Adjudicating Authority dismissed the petition, holding that the appellant's claim was not a financial debt within the meaning of Section 5(8) of the IBC. The appellant, being aggrieved by this order, filed the present appeal.

## Facts

VRG Healthcare Pvt. Ltd. (Appellant) filed a petition under Section 7 of the IBC to initiate CIRP against VRG Infrastructure Pvt. Ltd. (Respondent). The NCLT, Mumbai Bench, dismissed the petition, stating the claim was not a financial debt under Section 5(8) of IBC. The Appellant and Respondent had common promoter directors, Mr. Ganesh Chakkarwar and Mr. Gitesh Muttemwar. A sum of INR 25,00,000 was transferred from the Respondent to the Appellant on 12.02.2011. The Appellant's balance sheet showed receipt of this money for FY 2010-11, co-signed by a common director. The Appellant's ledger account showed the amount accounted for against a credit entry in the name of Mr. Gitesh Muttemwar. The Appellant returned INR 10,00,000 to Mr. Muttemwar on 26.03.2011. The balance

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## Issues and analysis

### Issue 1: Whether the amount of INR 25,00,000 transferred from the Respondent to the Appellant constitutes a …

**Ratio:** The essential ingredients of a 'financial debt' under Section 5(8) of the IBC include a

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**Reasoning:** The Adjudicating Authority and the Appellate Tribunal found that the Appellant failed to

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**Interpretation:** Section 5(8) of the IBC defines 'financial debt' as a debt along with interest,

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**Application:** In this case, the Appellant failed to demonstrate that the transfer of INR

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## Parties

- **Judges:** Anant Bijay…; KanthiNar…
- **Appellants:** M/s VRG Healthcare…
- **Respondents:** M/s VRG Infrastruc…

## Timeline

- **2020-03-20 — Order by Adjudicating…**: The Adjudicating Authority (National Company Law Tribunal, Mumbai Bench) passed an order…
- **2006-12-01 — Appellant Inco…**: VRG Healthcare Pvt. Ltd.…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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