# In the matter of Earth Infrastructure Private Limited CA-565-C-II

> NCLT judgment dated 2020-01-08. Citation: TCN-2020-NCLT-02430. Earth Gracia Buildcon Private Limited, acting through its Resolution Professional (RP) Manisha…

- **Court:** NCLT
- **Order date:** 8 Jan 2020
- **Citation:** TCN-2020-NCLT-02430
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/earth-infrastructure-private-limited-ca-565-c-ii-0999b27f

## Summary

### Background

Earth Gracia Buildcon Private Limited, acting through its Resolution Professional (RP) Manisha Rawat, filed CA/565/C-III/ND/2019 in CP/401/IB/2017 under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, seeking a direction to the Resolution Professional of the Respondent/Corporate Debtor, Earth Infrastructure Limited, to recognize the applicant's claim as a 'Financial Debt' under Section 5(8) of the I&B Code, 2016. The applicant claimed to have advanced INR 16,82,17,052/- to the respondent, which is also under CIRP. The RP rejected the claim due to the absence of a loan agreement.

## Facts

Earth Gracia Buildcon Private Limited (Applicant), under CIRP, claimed to have advanced INR 16,82,17,052/- to Earth Infrastructure Limited (Corporate Debtor/Respondent), also under CIRP. The Applicant sought recognition as a 'Financial Creditor' under Section 5(8) of the I&B Code, 2016. The RP of the Corporate Debtor rejected the claim due to the absence of a loan agreement. The Applicant filed Form 'C' dated 08.04.2019, claiming INR 20,78,13,695/-, which was rejected on 25.07.2019. The Applicant contended its claim was based on transactions with five banks. The RP argued the application was baseless, and the Applicant failed to provide a loan agreement. The RP also stated the Applicant and Corporate Debtor are group companies with common directors. The Applicant's

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## Issues and analysis

### Issue 1: Whether the claim made by the Applicant Company is falling within the purview of financial debt as …

**Ratio:** A 'financial debt' must have the element of 'time value of money,' payment of interest,

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**Reasoning:** The court reasoned that the Applicant company relied on bank account statements and

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**Interpretation:** The interpretation of 'financial debt' under Section 5(8) of the IBC, 2016,

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**Application:** The court applied the definition of 'financial debt' to the facts and found

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## Parties

- **Judges:** Ch. Mohd Sharief…; K.K. V…
- **Appellants:** Earth Gracia…
- **Respondents:** Earth Infrastructu…

## Timeline

- **2017-01-01 — CP/401/IB/201…**: CP/401/IB/2017 filed under Section 60(5) of…
- **2019-04-08 — Form C F…**: Applicant filed requisite Form 'C' dated 08.04.2019 before the Resolution Professional…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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