# In the matter of Natconn Engineering Private Limited CP (IB) 1802-MB-2017

> NCLT judgment dated 2018-10-03. Citation: TCN-2018-NCLT-00679. The case pertains to an application filed by Daimler Financial Services India Private Limited…

- **Court:** NCLT
- **Order date:** 3 Oct 2018
- **Citation:** TCN-2018-NCLT-00679
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/natconn-engineering-private-limited-cp-ib-1802-mb-2017-5fea821b

## Summary

### Background

The case pertains to an application filed by Daimler Financial Services India Private Limited (Financial Creditor) under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Natconn Engineering Private Limited (Corporate Debtor) for initiation of Corporate Insolvency Resolution Process (CIRP) due to default in repayment of a loan. The Financial Creditor had sanctioned a loan to the Corporate Debtor, which was to be repaid in 36 EMIs. The Corporate Debtor defaulted in making payments, leading to the issuance of loan recall notices and an insolvency demand notice by the Financial Creditor. Despite these notices, the Corporate Debtor failed to repay the outstanding amount.

## Facts

Daimler Financial Services India Private Limited (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 against Natconn Engineering Private Limited (Corporate Debtor). The Financial Creditor is an incorporated company engaged in the business of Non-Banking Financial Services. One of the directors of the Corporate Debtor, Mr. Vijayshankar Jha, approached the Financial Creditor for a loan to purchase a car in the name of the Corporate Debtor. A loan agreement was entered on 2013-03-28, where the Corporate Debtor was supposed to repay the availed loan amount in 36 EMIs starting from 2013-03-30 to 2016-03-30. The Corporate Debtor defaulted since 2014-03-30. The outstanding amount was ₹ 29,29,149/- along with interest at the

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## Issues and analysis

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

**Ratio:** Section 5(8) of the Insolvency and Bankruptcy Code, 2016 defines 'financial debt' as a

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**Reasoning:** The Adjudicating Authority considered the loan agreement and the disbursement of funds by

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**Interpretation:** The term 'financial debt' is interpreted broadly to include any debt disbursed

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**Application:** In this case, the loan provided by the Financial Creditor to the Corporate

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## Parties

- **Judges:** M.K. Sh…
- **Appellants:** M/s. Daimler…
- **Respondents:** M/s. Natconn…

## Timeline

- **2013-03-28 — Loan Agre…**: Loan Agreement entered between Daimler Financial Services India Private Limited and…
- **2013-03-30 — EMI Start…**: Scheduled start date for EMI payments by…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(8) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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