# In the matter of Golden Tobacco Limited

> NCLT judgment dated 13 May 2024. Citation: TCN-2024-NCLT-01367. The case involves an application filed by Sheth Developers Pvt Ltd. (Applicant) seeking…

- **Court:** NCLT
- **Order date:** 13 May 2024
- **Citation:** TCN-2024-NCLT-01367
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/golden-tobacco-limited-dd7079cc

## Summary

### Background

The case involves an application filed by Sheth Developers Pvt Ltd. (Applicant) seeking verification of its claim and classification as a Secured Financial Creditor under Section 60(5) of the Insolvency and Bankruptcy Code, 2016. The Corporate Insolvency Resolution Process (CIRP) was initiated against Golden Tobacco Limited (Corporate Debtor) on June 7, 2022. The Applicant, a real estate developer, claimed to be a secured creditor, but its claim was initially rejected by the Interim Resolution Professional (IRP), AVM Resolution Professionals LLP.

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## Facts

The Applicant, Sheth Developers Pvt Ltd., is engaged in real estate projects and claims to be a secured creditor of the Corporate Debtor, Golden Tobacco Limited. The Corporate Insolvency Resolution Process (CIRP) was initiated against the Corporate Debtor on June 7, 2022. The Interim Resolution Professional (IRP), AVM Resolution Professionals LLP, initially rejected the Applicant's claim as 'Financial Debt' and refused to recognize its secured status.

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## Issues and analysis

### Issue 1: Whether the Applicant is entitled to claim interest on the debt amount advanced to the Corporate…

**Ratio:** An applicant is entitled to claim interest on a financial debt if the corporate debtor's…

**Reasoning:** The Tribunal reasoned that the Corporate Debtor's own annual reports, balance sheets, and…

**Interpretation:** The court interpreted the MoU, annual reports, balance sheets, and admissions…

**Application:** Applying this interpretation, the Tribunal found that the Corporate Debtor had…

## Parties

- **Judges:** Chitra Ha…; Velamur G Venkata…
- **Advocates:** For the Applicant:…; Jay Kansara, Adv.…; +2 more

## Timeline

- **December 26, 2009 — MoU Sign…**: The applicant entered into a Memorandum of Understanding (MoU) with the Corporate Debtor…
- **May 12, 2016 — MoU Declare…**: The Hon'ble Supreme Court declared the MoU void in the matter of Director General of…

## 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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