# In the matter of Great Aid Marketing Private Limited Company Petition No. (IB)- 258 (PB) -2019

> NCLT judgment dated 2019-09-25. Citation: TCN-2019-NCLT-01249. The case involves an application filed by Prayag Polytech Private Limited (Applicant/Financial…

- **Court:** NCLT
- **Order date:** 25 Sept 2019
- **Citation:** TCN-2019-NCLT-01249
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/great-aid-marketing-private-limited-company-petition-no-ib-258-pb-2019-6a7e0dbd

## Summary

### Background

The case involves an application filed by Prayag Polytech Private Limited (Applicant/Financial Creditor) under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against Great Aid Marketing Private Limited (Respondent/Corporate Debtor). The applicant claims that the respondent defaulted on a loan of Rs. 65,00,000/- disbursed in two tranches (Rs. 40,00,000/- on 01.04.2016 and Rs. 25,00,000/- on 19.12.2016). The applicant contends that a sum of Rs. 84,38,656/- including interest is due as of 25.12.2018. The respondent raised objections, including the claim that the applicant is not a 'financial creditor' and that the debt is not a 'financial debt' as defined under the Code, and that the loan was

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## Facts

Prayag Polytech Private Limited (the applicant) disbursed Rs. 40,00,000/- to Great Aid Marketing Private Limited (the respondent) on 01.04.2016 as a loan. A further amount of Rs. 25,00,000/- was disbursed on 19.12.2016, bringing the total loan amount to Rs. 65,00,000/-. The applicant claimed that Rs. 84,38,656/- including interest was due as of 25.12.2018. The applicant filed bank statements, auditor's reports, and Form-26AS to support its claim. The respondent admitted that the loan was a long-term borrowing but claimed that it was repayable after seven years based on an oral agreement. The respondent also contended that there were pending disputes between the management of the financial creditor and the corporate debtor. The applicant issued a demand notice dated

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## Issues and analysis

### Issue 1: Whether the applicant, Prayag Polytech Private Limited, qualifies as a 'financial creditor' under …

**Ratio:** A 'financial creditor' is defined under Section 5(7) of the IBC as a person to whom a

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**Reasoning:** The tribunal found that the applicant had disbursed a loan to the respondent, which was

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**Interpretation:** The term 'financial creditor' is interpreted broadly to include entities that

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**Application:** The tribunal applied the definition of 'financial creditor' to the facts of the

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## Parties

- **Judges:** M. M. K…; S. K. MOH…
- **Appellants:** Prayag Polytech…
- **Respondents:** Great Aid…

## Timeline

- **2016-04-01 — Loan Disbur…**: Applicant disbursed Rs. 40,00,000/-…
- **2016-12-19 — Further Loan Disbursemen…**: Applicant disbursed a further amount of Rs.…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(7) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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