# In the matter of Nvento Foods Technologies Pvt. Ltd. TCP No. 639-I&BP-NCLT-MB-MAH-2017

> NCLT judgment dated 2017-08-23. Citation: TCN-2017-NCLT-00535. HDFC Bank Limited initiated a petition against Nvento Foods Technologies Pvt. Ltd. under…

- **Court:** NCLT
- **Order date:** 23 Aug 2017
- **Citation:** TCN-2017-NCLT-00535
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/nvento-foods-technologies-pvt-ltd-tcp-no-639-ibp-nclt-mb-mah-2017-694d7f32

## Summary

### Background

HDFC Bank Limited initiated a petition against Nvento Foods Technologies Pvt. Ltd. under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to commence the Corporate Insolvency Resolution Process (CIRP) due to a financial debt of ₹20,00,000. Initially, the petition was filed before the Bombay High Court under the Companies Act, but it was transferred to the NCLT, Mumbai Bench, due to changes in the law. The bank claimed that Nvento Foods Technologies had defaulted on a cash credit facility that was initially sanctioned for ₹20 lakhs and subsequently renewed. Nvento Foods Technologies admitted to owing the debt but sought more time to repay it, citing financial difficulties and proposing to mortgage the directors' personal property.

## Facts

HDFC Bank Limited sanctioned a cash credit facility of ₹20 lakhs to Nvento Foods Technologies Pvt. Ltd., which was renewed multiple times. Nvento Foods Technologies defaulted on the repayment, leading HDFC Bank to classify the account as a Non-Performing Asset (NPA) on 29.10.2014. HDFC Bank issued a notice under Section 13(2) of the SARFAESI Act on 25.05.2015, demanding payment of ₹19,43,502 plus interest. Nvento Foods Technologies admitted to owing the debt but claimed financial difficulties. They also made some repayments totaling ₹3,40,500 between 31.01.2015 and 29.06.2016. HDFC Bank filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate CIRP against Nvento Foods Technologies for a financial debt of ₹20,00,000. The initial

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## Issues and analysis

### Issue 1: Whether the debt owed by Nvento Foods Technologies Pvt. Ltd. to HDFC Bank qualifies as a 'Financial …

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

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**Reasoning:** The NCLT observed that the debt in question arose from a cash credit facility sanctioned

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**Interpretation:** The interpretation of Section 5(8) focuses on whether the debt was disbursed

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**Application:** In this case, the cash credit facility provided by HDFC Bank to Nvento Foods

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## Parties

- **Judges:** M.K. Sh…; Bhaskara Pantula…
- **Appellants:** HDFC Bank L…
- **Respondents:** Nvento Foods…

## Timeline

- **N/A — Initial Pe…**: The Petitioner initially filed a Petition before the Hon'ble Bombay High Court by…
- **2016-01-01 — Enactment…**: Due to change in Law the said Petition…

## 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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