# In the matter of Mansadevi Bakers Pvt. Ltd. CP(IB) No. 30-7-HDB-2019

> NCLT judgment dated 2019-08-22. Citation: TCN-2019-NCLT-01849. The case involves a Company Petition filed by Abhishek Agarwal and others (Financial Creditors)…

- **Court:** NCLT
- **Order date:** 22 Aug 2019
- **Citation:** TCN-2019-NCLT-01849
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/mansadevi-bakers-pvt-ltd-cpib-no-30-7-hdb-2019-8eff8cfb

## Summary

### Background

The case involves a Company Petition filed by Abhishek Agarwal and others (Financial Creditors) against Manasadevi Bakers Private Limited (Corporate Debtor) under Section 7 of the Insolvency and Bankruptcy Code, 2016. The financial creditors are individual persons/businessmen, and their relatives are directors and 50% shareholders of the Corporate Debtor. The Managing Director requested unsecured loans, and Rs. 66,75,000/- was disbursed. The Corporate Debtor showed this amount as an unsecured loan in its financial statements from 2006-07 to 2015-16 but did not file statements for 2016-17 and 2017-18. As of 2018-12-10, the Corporate Debtor owed Rs. 1,47,81,477/- including principal and interest. The petitioners approached the Adjudicating Authority seeking an order for

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## Facts

Abhishek Agarwal and others, claiming to be Financial Creditors, filed a petition against Manasadevi Bakers Private Limited (Corporate Debtor) under Section 7 of the IBC. The Financial Creditors are related to the directors and shareholders of the Corporate Debtor. They provided an unsecured loan of Rs. 66,75,000/- to the Corporate Debtor, which was reflected in the Corporate Debtor's financial statements until 2015-16. The Corporate Debtor defaulted on the loan, with the outstanding amount reaching Rs. 1,47,81,477/- as of 2018-12-10. The Corporate Debtor argued that the loan was interest-free and that a subordination agreement existed with Canara Bank, preventing the Financial Creditors from pursuing their claim until the bank's debt was settled. The Financial

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## Issues and analysis

### Issue 1: Whether the petitioners would fall under the …

**Ratio:** A financial creditor is defined under the IBC as a person to whom a financial debt is

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**Reasoning:** The Adjudicating Authority reasoned that the unsecured loan provided by the petitioners

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**Interpretation:** The interpretation of 'financial debt' under Section 5(8) of the IBC requires

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**Application:** In this case, the absence of interest on the unsecured loan and the existence

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## Parties

- **Judges:** K. Anantha…; BINOD KUMAR…
- **Appellants:** Abhishek A…
- **Respondents:** Manasadevi Bakers…; Mansadevi Bakers…

## Timeline

- **2007-04-29 — MOU Ente…**: Memorandum of Understanding…
- **2012-02-08 — Agreement E…**: Another agreement was entered…

## 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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