# In the matter of Magicon Impex Pvt. Ltd. (IB)-88(ND)-2021

> NCLT judgment dated 2021-10-11. Citation: TCN-2021-NCLT-00759. The petition was filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC, 2016)…

- **Court:** NCLT
- **Order date:** 11 Oct 2021
- **Citation:** TCN-2021-NCLT-00759
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/magicon-impex-pvt-ltd-ib-88nd-2021-746db6de

## Summary

### Background

The petition was filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC, 2016) read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 by Mr. Surendra Kanaiyalal Shah, the proprietor of Shah Photo Film Company, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s Magicon Impex Private Limited. The matter was heard on the issue of maintainability of the application under Section 7 of IBC, 2016, and whether the amount claimed by the applicant is covered under the definition of 'Financial Debt'.

## Facts

Mr. Surendra Kanaiyalal Shah, through his proprietorship Shah Photo Film Company, filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s Magicon Impex Private Limited. The Financial Creditor claimed that the Corporate Debtor defaulted on the payment of an interest amount totaling Rs. 10,05,672/-, with the default date being 25th January 2020. The total amount claimed to be in default, including interest, is Rs. 80,05,672/-. The Financial Creditor argued that the Corporate Debtor had appointed them as a 'Consignment and Freight Agent' and, for that purpose, an agreement was executed on 25.03.2019. By virtue of an agreement dated 25.02.2019, the Financial Creditor had paid

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## Issues and analysis

### Issue 1: Whether the amount claimed by the Applicant in Part IV of the Application is covered under the …

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

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**Reasoning:** The Adjudicating Authority reasoned that the amount released pursuant to the agreement

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**Interpretation:** The interpretation of 'Financial Debt' under Section 5(8)(f) of the IBC, 2016,

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**Application:** In this case, the security deposit of Rs. 70,00,000/- provided by the Financial

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## Parties

- **Judges:** DEEPTI M…; L. N. G…
- **Appellants:** Surendra Kanaiyala…
- **Respondents:** M/s. Magicon…

## Timeline

- **2021-02-10 — First Li…**: Application filed under Section 7 of IBC,…
- **2021-03-10 — Non-Appea…**: Applicant's non-appearan…

## 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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