# In the matter of Tirupati Ceramics Ltd. CP (IB) No. 50-Chd-Hry-2017

> NCLT judgment dated 2017-09-29. Citation: TCN-2017-NCLT-00336. Sahara Fincon Private Limited filed a petition under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 29 Sept 2017
- **Citation:** TCN-2017-NCLT-00336
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/tirupati-ceramics-ltd-cp-ib-no-50-chd-hry-2017-8f7c5dc8

## Summary

### Background

Sahara Fincon Private Limited filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Tirupati Ceramics Ltd., seeking to initiate the corporate insolvency resolution process. Sahara Fincon claimed to be a financial creditor based on a Memorandum of Understanding (MoU) where it invested ₹564 lacs in Tirupati Ceramics for equity shares and repayment to HSIIDC for revival of the company. The respondent, Tirupati Ceramics, argued that Sahara Fincon was a strategic investor and not a financial creditor, and that no default had been committed. The matter was previously before the Board for Industrial and Financial Reconstruction (BIFR), but those proceedings abated due to legislative changes.

## Facts

Sahara Fincon Private Limited (the petitioner) filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Tirupati Ceramics Ltd. (the respondent), seeking to initiate the corporate insolvency resolution process. The petitioner claimed to be a financial creditor, asserting that it had invested ₹564 lacs in the respondent company based on a Memorandum of Understanding (MoU) dated 16.11.2009. This investment was intended for equity infusion and repayment to HSIIDC for the revival of the respondent company. The petitioner had already purchased 2,31,000 equity shares of the respondent from HSIIDC for ₹23.75 lacs. The MoU stipulated that the respondent would use the funds to settle pressing liabilities, including payments to Apollo Equipment

…

## Issues and analysis

### Issue 1: Whether the petitioner, Sahara Fincon Private Limited, falls within the definition of 'Financial …

**Ratio:** Section 5(7) of the IBC defines 'Financial Creditor' as any person to whom a financial

…

**Reasoning:** The court reasoned that the investment made by Sahara Fincon was disbursed against the

…

**Interpretation:** The court interpreted the terms 'Financial Creditor' and 'financial debt'

…

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

…

## Parties

- **Judges:** R.P.Nag…
- **Appellants:** Sahara Fincon…
- **Respondents:** Tirupati Ceramics…

## Timeline

- **2008-06-26 — Incorporation of…**: Sahara Fincon Private…
- **1995-12-29 — Incorporation of…**: Tirupati Ceramics Ltd.…

## 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)

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclt-chandigarh/tirupati-ceramics-ltd-cp-ib-no-50-chd-hry-2017-8f7c5dc8