# In the matter of Bharat NRE Coke Limited CA(IB) No. 1110-KB-2018 In CP (IB) No. 1340-KB-2018

> NCLT judgment dated 2019-03-11. Citation: TCN-2019-NCLT-04488. Jindal Steel & Power Limited, the Financial Creditor, filed an application under Section 7 of…

- **Court:** NCLT
- **Order date:** 11 Mar 2019
- **Citation:** TCN-2019-NCLT-04488
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/bharat-nre-coke-limited-caib-no-1110-kb-2018-in-cp-ib-no-1340-kb-2018-19918bb3

## Summary

### Background

Jindal Steel & Power Limited, the Financial Creditor, filed an application under Section 7 of the Insolvency & Bankruptcy Code, 2016, against Bharat NRE Coke Limited, the Corporate Debtor, for initiating Corporate Insolvency Resolution Process (CIRP). The Financial Creditor alleged that the Corporate Debtor defaulted in paying a financial debt of Rs. 94,18,89,786/-, which included the principal sum, accrued interest, and amounts payable towards damages and costs of arbitration proceedings. The Corporate Debtor was the guarantor for Gujarat NRE Coke Ltd., which had entered into a coal purchase agreement with the Financial Creditor. The Financial Creditor had advanced Rs. 39.50 crores to Gujarat NRE Coke Ltd. The Corporate Debtor pledged shares as a guarantee for

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## Facts

Jindal Steel & Power Limited (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code (IBC) against Bharat NRE Coke Limited (Corporate Debtor) to initiate the Corporate Insolvency Resolution Process (CIRP). The claim was for Rs. 94,18,89,786/-, including principal, interest, and arbitration costs. The Corporate Debtor was the guarantor for Gujarat NRE Coke Ltd. for a coal purchase agreement with the Financial Creditor. The Financial Creditor advanced Rs. 39.50 crores to Gujarat NRE Coke Ltd. The Corporate Debtor pledged two crore shares as a guarantee. Gujarat NRE Coke Ltd. did not supply the coal. An arbitration award was passed against the Corporate Debtor and Gujarat NRE Coke Ltd. The Corporate Debtor challenged the award

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## Issues and analysis

### Issue 1: Whether the amount claimed by the applicant/financial creditor on the basis of award dated …

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

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**Reasoning:** The Adjudicating Authority reasoned that the advance payment made by the Financial

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**Interpretation:** The interpretation of 'financial debt' under Section 5(8)(f) of the I&B

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**Application:** The Adjudicating Authority applied the definition of 'financial debt' to the

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## Parties

- **Judges:** Madan B.…
- **Appellants:** Jindal Steel and…
- **Respondents:** Bharat NRE Coke…

## Timeline

- **2013-08-27 — Coal Purchase…**: Gujarat NRE Coke Ltd. and Jindal Steel & Power Ltd. entered into a coal purchase…
- **2013-08-27 — Share Pledge A…**: Bharat NRE Coke Limited executed a share pledge agreement in favor of Jindal Steel &…

## 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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