# In the matter of Panacealife Healthzone Pvt. Ltd. Company Petition (IB)No. 458-ALD-2019

> NCLT judgment dated 2020-09-03. Citation: TCN-2020-NCLT-00724. The case involves a petition filed by Siemens Financial Services Pvt. Ltd. (later substituted…

- **Court:** NCLT
- **Order date:** 3 Sept 2020
- **Citation:** TCN-2020-NCLT-00724
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/panacealife-healthzone-pvt-ltd-company-petition-ibno-458-ald-2019-d6e5ab51

## Summary

### Background

The case involves a petition filed by Siemens Financial Services Pvt. Ltd. (later substituted by Alchemist Asset Reconstruction Company Ltd.) under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against Panacealife Healthzone Private Limited due to its inability to liquidate its financial debt. The corporate debtor had approached the applicant for financial facilities, leading to a finance agreement dated 30.09.2015. The corporate debtor also issued guarantee agreements and promissory notes, but failed to pay the outstanding amount of Rs.3,60,25,409/- despite repeated demands. Two substitution applications were filed, IA No. 148/2020 and IA No. 164/2020, seeking to substitute Siemens Financial

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## Facts

Siemens Financial Services Pvt. Ltd. (later substituted by Alchemist Asset Reconstruction Company Ltd.) filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Panacealife Healthzone Private Limited. The basis for the petition was the corporate debtor's inability to liquidate its financial debt. The corporate debtor had approached Siemens Financial Services for financial facilities, leading to a finance agreement dated 30.09.2015. The corporate debtor also issued guarantee agreements and promissory notes. The total outstanding amount was Rs.3,60,25,409/-, and despite repeated demands, the payment was not made. The date of default was 13.03.2017, and the corporate debtor was

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## Issues and analysis

### Issue 1: Whether there is a duly …

**Ratio:** The existence of a financial debt is a prerequisite for initiating CIRP under Section 7

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**Reasoning:** The court examined the finance agreement dated 30.09.2015, guarantee agreements, and

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**Interpretation:** The court interpreted the term 'financial debt' as defined under the IBC,

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**Application:** The court found that the finance agreement, guarantee agreements, and

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## Parties

- **Judges:** Rajesh Daya…
- **Appellants:** Alchemist Asset…
- **Respondents:** PANACEALIFE…

## Timeline

- **2015-09-30 — Finance Agr…**: Applicant entered into a finance…
- **2015-12-23 — Sanction…**: Sanction letter issued…

## 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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