# In the matter of Raipur Power and Steel Ltd & Ors C.P (IB)-09 (PB)-2017

> NCLT judgment dated 2017-02-23. Citation: TCN-2017-NCLT-00966. The case involves an application filed by Tomorrow Sales Agency Pvt. Ltd., a non-banking…

- **Court:** NCLT
- **Order date:** 23 Feb 2017
- **Citation:** TCN-2017-NCLT-00966
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/raipur-power-and-steel-ltd-ors-cp-ib-09-pb-2017-5caaa07d

## Summary

### Background

The case involves an application filed by Tomorrow Sales Agency Pvt. Ltd., a non-banking financial company, against Raipur Power and Steel Ltd. & Ors. under Section 7 of the Insolvency and Bankruptcy Code, 2016. Tomorrow Sales Agency claims to be a financial creditor, having disbursed an unsecured loan of Rs. 15 crores to Raipur Power and Steel at an interest rate of 12% per annum. The loan was allegedly extended without a formal agreement, and the respondent company, Raipur Power and Steel, is claimed to be in default of Rs. 17,37,00,000/-. The petitioner argues that the respondent's failure to repay the loan warrants the initiation of the insolvency process.

## Facts

Tomorrow Sales Agency Pvt. Ltd., a non-banking financial company registered with the RBI, claims to be a 'Financial Creditor' to Raipur Power and Steel Ltd. Raipur Power and Steel approached Tomorrow Sales Agency for a temporary unsecured loan due to financial difficulties. Tomorrow Sales Agency disbursed an unsecured loan of Rs. 15 crores to Raipur Power and Steel at 12% interest per annum between 2014-10-11 and 2014-11-11. The loan was allegedly extended without a formal agreement. Raipur Power and Steel confirmed the loan amount and accrued interest through communication dated 2016-04-01 for the financial year 2015-2016, signed by Mr. Neeraj Sharma. Raipur Power and Steel defaulted on the loan, with a total outstanding amount of Rs. 17,37,00,000 as of 2015-07-23.

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## Issues and analysis

### Issue 1: Whether Tomorrow Sales Agency Pvt. Ltd. qualifies as a 'Financial Creditor' under Section 5(7) of …

**Ratio:** A 'Financial Creditor' is a person to whom a financial debt is owed and includes a person

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**Reasoning:** The court relied on the definition of 'Financial Creditor' under Section 5(7) of the IBC

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**Interpretation:** The court interpreted Section 5(7) of the IBC to mean that any entity to whom a

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**Application:** The court applied the definition of 'Financial Creditor' to the facts of the

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## Parties

- **Judges:** M. M. K…; R. VARADH…
- **Appellants:** Tomorrow Sales…
- **Respondents:** Raipur Power and…

## Timeline

- **2009-11-03 — RBI Regist…**: Tomorrow Sales Agency Pvt. Ltd. is registered as a non-banking financial company by the…
- **2014-10-11 — Loan Disbur…**: Tomorrow Sales Agency disbursed Rs.…

## 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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