# In the matter of Sadbhav Enterprise Pvt. Ltd. CP (IB) No. 115-7-NCLT-AHM-2017

> NCLT judgment dated 2017-09-19. Citation: TCN-2017-NCLT-00395. V.R. Polyfab Private Limited, claiming to be a Financial Creditor, filed an application under…

- **Court:** NCLT
- **Order date:** 19 Sept 2017
- **Citation:** TCN-2017-NCLT-00395
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/sadbhav-enterprise-pvt-ltd-cp-ib-no-115-7-nclt-ahm-2017-359a66b3

## Summary

### Background

V.R. Polyfab Private Limited, claiming to be a Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process against Sadbhav Enterprise Private Limited, categorizing it as a 'Corporate Debtor'. The applicant had advanced unsecured loans to the respondent starting in 2014. The respondent failed to pay an amount of Rs. 4,47,85,703/- with 9% interest despite repeated reminders. The respondent raised objections, including the claim that the debt does not fall within the definition of 'financial debt' and that there are related party transactions.

## Facts

V.R. Polyfab Private Limited (the Applicant) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process against Sadbhav Enterprise Private Limited (the Respondent), claiming to be a Financial Creditor. The Applicant advanced unsecured loans to the Respondent starting in 2014. The initial loan was Rs. 90,00,000 on 2014-06-09. Further loans were given during the financial year 2014-15, totaling Rs. 3,03,60,000. The Respondent deducted TDS on the interest payable on the debt. The Applicant gave an additional Rs. 1,62,97,000 towards an unsecured loan in the year ended 2016-03-31. The Respondent repaid Rs. 1,50,00,000 in the year 2015-16. The Applicant gave another Rs. 83,87,500 in the year ended

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## Issues and analysis

### Issue 1: Whether the amount claimed from the …

**Ratio:** A 'financial debt' means a debt along with interest, if any, which is disbursed against

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**Reasoning:** The Adjudicating Authority examined the documents, including ledger accounts and TDS

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

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**Application:** The Adjudicating Authority found that the unsecured loans given by the

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## Parties

- **Judges:** BIKKI RAVEENDRA…
- **Appellants:** V.R. Polyfab…
- **Respondents:** Sadbhav Enterprise…; Sadbhav Enterprise…

## Timeline

- **2014-06-09 — Initial…**: Applicant advanced a loan of Rs.…
- **2014-01-01 — Loans during F…**: Applicant advanced loans totaling…

## 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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