# In the matter of GRL Tires Private LImited CP No. 3540-IBC_NCLT-MB-2018

> NCLT judgment dated 2019-11-20. Citation: TCN-2019-NCLT-00535. Park Chambers Limited, the Financial Creditor, filed an application under Section 7 of the…

- **Court:** NCLT
- **Order date:** 20 Nov 2019
- **Citation:** TCN-2019-NCLT-00535
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/grl-tires-private-limited-cp-no-3540-ibc_nclt-mb-2018-aad143b4

## Summary

### Background

Park Chambers Limited, the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against GRL Tires Private Limited, the Corporate Debtor, due to a default on a loan facility. The Financial Creditor claimed a total debt of ₹7,00,00,000/- with an additional ₹12,65,16,380/- claimed as default amount including interest. The Corporate Debtor did not respond to the petition or appear during the hearings.

## Facts

Park Chambers Limited (Financial Creditor) granted a loan facility of ₹7,00,00,000/- to GRL Tires Private Limited (Corporate Debtor). The loan was disbursed in two tranches: ₹5,00,00,000/- on 2014-05-05 and ₹2,00,00,000/- on 2014-05-06. The Corporate Debtor acknowledged the loan via a letter dated 2014-05-06, agreeing to an interest rate of 15% p.a. for a period of 3 years. The Corporate Debtor also issued a post-dated cheque dated 2017-06-05 for ₹7,00,00,000/-. The Financial Creditor claimed a default of ₹12,65,16,380/- as of 2018-07-17, including interest. The Corporate Debtor failed to make submissions or appear during the hearings. The Financial Creditor submitted Form No. 1 under Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority)

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## Issues and analysis

### Issue 1: Whether the nature of debt is a 'Financial Debt' …

**Ratio:** The legal principle applied is the definition of 'Financial Debt' under Section 5(8) of

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**Reasoning:** The court reasoned that the loan provided by the Financial Creditor to the Corporate

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**Interpretation:** The interpretation of 'Financial Debt' involves examining the nature of the

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**Application:** In this case, the court applied the definition of 'Financial Debt' to the loan

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## Parties

- **Judges:** M.K. Sh…; Chandra Bha…
- **Appellants:** Park Chambers…
- **Respondents:** GRL Tires Private…
- **Advocates:** Jayanta…; Soumen…

## Timeline

- **2014-05-05 — Loan Disbur…**: Financial Creditor disbursed…
- **2014-05-06 — Loan Disbur…**: Financial Creditor disbursed…

## 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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