# In the matter of Affluence Engineering and Enterprises Ltd. CP(IB)No. 231-7-HDB-2020

> NCLT judgment dated 2021-01-18. Citation: TCN-2021-NCLT-03272. The case involves a petition filed by Foster Infin and Trading Private Limited (Financial…

- **Court:** NCLT
- **Order date:** 18 Jan 2021
- **Citation:** TCN-2021-NCLT-03272
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/affluence-engineering-and-enterprises-ltd-cpibno-231-7-hdb-2020-d9cecc50

## Summary

### Background

The case involves a petition filed by Foster Infin and Trading Private Limited (Financial Creditor) against Affluence Engineering and Enterprises Ltd. (Corporate Debtor) under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC). The Financial Creditor claimed that the Corporate Debtor defaulted in repaying a sum of Rs. 1,37,34,514, which included a principal amount of Rs. 61,58,975 and interest calculated at 36% per annum from 01.12.2016 to 30.04.2020. The Corporate Debtor denied the averments, claiming the petition was barred by limitation and the debt arose from a purely business transaction.

## Facts

Foster Infin and Trading Private Limited (Financial Creditor) filed a petition against Affluence Engineering and Enterprises Ltd. (Corporate Debtor) under Section 7 of the Insolvency and Bankruptcy Code, 2016. The Financial Creditor claimed that the Corporate Debtor defaulted on a payment of Rs. 1,37,34,514, which included a principal amount of Rs. 61,58,975 and interest at 36% per annum from 01.12.2016 to 30.04.2020. The Financial Creditor had supplied 130 MTs of TMT bars in May 2016 and another 30 MTs in October 2016 to the Corporate Debtor. On 01.11.2017, both parties entered into a Loan Agreement to repay the outstanding amount in 8 quarterly installments starting from 01.12.2017 with 36% interest. The Corporate Debtor failed to make any installments. The Corporate

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## Issues and analysis

### Issue 1: Whether the application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 is …

**Ratio:** The legal principle applied is that an application under Section 7 of the IBC is

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**Reasoning:** The court reasoned that the Corporate Debtor had admitted to the debt and the Loan

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**Interpretation:** The interpretation is that Section 7 of the IBC allows a financial creditor to

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**Application:** The court applied this principle to the facts by noting that the Loan Agreement

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## Parties

- **Judges:** K. Anantha…; Veera Brahma Rao…
- **Appellants:** Foster Infin &…
- **Respondents:** Affluence…; Affluence…

## Timeline

- **2016-05-01 — Purchase Order…**: Financial Creditor received a Purchase…
- **2016-10-01 — Second Purchase Order…**: Financial Creditor received another Purchase…

## 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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