# In the matter of Ethan Textile India Pvt Ltd C.P. No. (IB) 496-9-NCLT-AHM-2019

> NCLT judgment dated 2020-12-09. Citation: TCN-2020-NCLT-00120. Nilu R. Ahuja, claiming to be a financial creditor and shareholder of Ethan Textile India…

- **Court:** NCLT
- **Order date:** 9 Dec 2020
- **Citation:** TCN-2020-NCLT-00120
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/ethan-textile-india-pvt-ltd-cp-no-ib-496-9-nclt-ahm-2019-056e2a55

## Summary

### Background

Nilu R. Ahuja, claiming to be a financial creditor and shareholder of Ethan Textile India Private Limited, filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, seeking reliefs under Section 7(5)(a) and Section 13(1)(a)(b)(c) of the Code. The applicant claimed to have extended financial assistance to the respondent company on different occasions. The respondent raised objections, stating that the application was based on purported loans given when the corporate debtor was controlled by the applicant's husband, and that there was no loan agreement or proof of disbursement.

## Facts

Nilu R. Ahuja, an individual and shareholder of Ethan Textile India Private Limited, filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, claiming to be a financial creditor. She alleged that she had given loans to the respondent company, resulting in a debt of Rs. 32,10,258/-. The respondent, Ethan Textile India Private Limited, argued that the loans were given when the company was controlled by the applicant's husband, Rajendra Ahuja, and that there was no loan agreement. The respondent also claimed that the debt was time-barred and that the application was incomplete. The applicant submitted documents such as ledger accounts, audited balance sheets, and bank statements to support her claim. The NCLT found that the applicant had not provided

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## Issues and analysis

### Issue 1: Whether the debt claimed by the applicant falls within the definition of "financial debt" …

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

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**Reasoning:** The NCLT found that the applicant had not provided sufficient evidence to demonstrate

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**Interpretation:** The interpretation of Section 5(8) requires that a financial debt must be

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**Application:** In this case, the applicant failed to provide sufficient evidence to

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## Parties

- **Judges:** Manorama…; Chockalingam…
- **Appellants:** Nilu R…
- **Respondents:** Ethan Textile…; M/s. Ethan…
- **Advocates:** Vishal…; Tirth N…; +2 more

## Timeline

- **2016-01-01 — Enactment…**: The Insolvency and…
- **2020-12-09 — Order Del…**: Order delivered on 9th December,…

## 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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