# In the matter of Avance Logistics & Trading India Pvt. Ltd. CP No. 1245-I&BC-NCLT-MB-MAH-2017

> NCLT judgment dated 2017-09-11. Citation: TCN-2017-NCLT-00433. Bell Finvest (India) Limited, a financial creditor, filed a petition under Section 7 of the…

- **Court:** NCLT
- **Order date:** 11 Sept 2017
- **Citation:** TCN-2017-NCLT-00433
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/avance-logistics-trading-india-pvt-ltd-cp-no-1245-ibc-nclt-mb-mah-2017-0f611d47

## Summary

### Background

Bell Finvest (India) Limited, a financial creditor, filed a petition under Section 7 of the Insolvency & Bankruptcy Code, 2016, against Advance Logistics & Trading India Pvt. Ltd., the corporate debtor, due to default in repayment of a loan. The corporate debtor had approached the financial creditor for a temporary loan of ₹40 lakhs, which was sanctioned as ₹36 lakhs with a flat interest rate of 10% p.a. The corporate debtor defaulted on repayments starting from 19.02.2016.

## Facts

Bell Finvest (India) Limited, a registered Non-Banking Financial Company (NBFC), extended a loan of ₹36 lakhs to Advance Logistics & Trading India Pvt. Ltd. The loan agreement, dated 14th October 2015, stipulated repayment in 10 equal monthly installments with a 10% p.a. interest rate. The Corporate Debtor defaulted on repayments from 19th February 2016. The Financial Creditor claimed an outstanding financial debt of ₹53,43,350/- as of 30th June 2017, including principal and interest. The Corporate Debtor alleged irregularities by the Financial Creditor, including charging exorbitant interest rates and violating NBFC regulations. A personal guarantee was executed by Mrs. Puja Vijay Relwani and Mr. Vijay Prahlad Relwani on 14th October 2015. The loan amount was

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## Issues and analysis

### Issue 1: Whether the debt qualifies as a 'Financial Debt' under Section 5(8) of the Insolvency & …

**Ratio:** Section 5(8) of the Insolvency & Bankruptcy Code, 2016, defines 'Financial Debt' as a

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**Reasoning:** The court found that the loan disbursed by the Financial Creditor to the Corporate Debtor

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**Interpretation:** The interpretation of Section 5(8) focuses on the nature of the debt and

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**Application:** In this case, the loan of ₹36 lakhs, along with the accrued interest, was

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## Parties

- **Judges:** M.K. Sh…; Bhaskara Pantula…
- **Appellants:** Bell Finvest…
- **Respondents:** Advance Logistics…
- **Advocates:** Aniruddh Purushott…; Ajay M. An…; +1 more

## Timeline

- **2015-10-14 — Loan Agreeme…**: Loan agreement between Bell Finvest (India) Limited and Advance Logistics & Trading India…
- **2015-10-14 — Personal Guarantee…**: Personal guarantee executed by Mrs. Puja…

## 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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