# In the matter of Spice Infra Trading Pvt. Ltd. CP No. 2326-IBC-NCLT-MB-MAH-2018

> NCLT judgment dated 2018-09-12. Citation: TCN-2018-NCLT-00776. The case involves an application under Section 7 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 12 Sept 2018
- **Citation:** TCN-2018-NCLT-00776
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/spice-infra-trading-pvt-ltd-cp-no-2326-ibc-nclt-mb-mah-2018-a0f5159f

## Summary

### Background

The case involves an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, by Evershine Advisory Services Private Limited (Financial Creditor) against Spice Infra Trading Private Limited (Corporate Debtor). The Financial Creditor claimed that the Corporate Debtor defaulted on a loan of ₹1,92,05,000/- disbursed in five tranches between 19.07.2017 and 07.02.2018, with a total claim in default amounting to ₹2,07,32,595/- inclusive of interest till 13.06.2018. The date of default was 18.04.2018. The Corporate Debtor failed to repay the loan or respond to the Financial Creditor's communications.

## Facts

Evershine Advisory Services Private Limited (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 against Spice Infra Trading Private Limited (Corporate Debtor). The Financial Creditor and Corporate Debtor entered into a Loan Agreement dated 14.07.2017, where the Financial Creditor sanctioned a loan of ₹2,00,00,000/- to the Corporate Debtor to meet working capital requirements. The loan was disbursed in five tranches between 19.07.2017 and 07.02.2018. The Corporate Debtor requested the disbursement of ₹1,50,00,000/- on 17.07.2017, which was disbursed on 19.07.2017. Similarly, a request for ₹40,00,000/- was made on 11.08.2017, disbursed on 14.08.2017. The total amount claimed to be in default is ₹2,07,32,595/-, inclusive

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## Issues and analysis

### Issue 1: Whether the Financial Creditor has established a financial debt and default by the Corporate Debtor …

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

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**Reasoning:** The Tribunal considered the loan agreement, disbursement details, and the Corporate

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**Interpretation:** The interpretation of 'Financial Debt' and 'Default' under the IBC is crucial

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**Application:** The Tribunal applied the definitions of 'Financial Debt' and 'Default' to the

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## Parties

- **Judges:** M.K. Sh…
- **Appellants:** M/s. Evershine…
- **Respondents:** M/s. Spice Infra…
- **Advocates:** Prabhujan…; Sunila C…

## Timeline

- **2017-07-14 — Loan Agre…**: Financial Creditor and Corporate Debtor entered…
- **2017-07-19 — Disbursement…**: ₹1,50,00,000/- disbursed…

## 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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