# In the matter of Toshniwal Enterprises Controls Limited C.P. (IB) No. 1175-KB-2019

> NCLT judgment dated 2019-11-22. Citation: TCN-2019-NCLT-00488. The Financial Creditor filed an application under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 22 Nov 2019
- **Citation:** TCN-2019-NCLT-00488
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/toshniwal-enterprises-controls-limited-cp-ib-no-1175-kb-2019-d166d7bd

## Summary

### Background

The Financial Creditor filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, alleging that the Corporate Debtor defaulted on a loan repayment. The Corporate Debtor failed to file a reply affidavit despite multiple opportunities, leading to the application being heard in their absence of written objections.

## Facts

M/s. Outlook Tracom Private Limited, the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against M/s. Toshniwal Enterprises Controls Limited, the Corporate Debtor. The application sought to initiate the Corporate Insolvency Resolution Process (CIRP) due to an alleged default in the repayment of a loan amounting to Rs. 50,00,000/-, along with interest at 12% per annum, despite repeated demands. The Financial Creditor claimed that the Corporate Debtor failed to repay the loan amount and interest. The Financial Creditor had granted two loans to the Corporate Debtor. The first loan of Rs. 50,00,000/- was advanced on May 11, 2015, and was repaid on February 17, 2018. The second loan, also for Rs. 50,00,000/-, was granted

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor under Section 7 of the Insolvency and …

**Ratio:** An application under Section 7 of the IBC is maintainable if there is a 'financial debt'

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**Reasoning:** The Tribunal found that the Financial Creditor had disbursed a loan of Rs. 50,00,000/- to

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**Interpretation:** The court interpreted 'financial debt' broadly to include any debt along with

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**Application:** Given the RTGS transfer of Rs. 50,00,000/-, the letter of intimation, and the

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## Parties

- **Judges:** Jinan…; Harish Chander…
- **Appellants:** Outlook Tracom…; M/s. Outlook…
- **Respondents:** Toshniwal…; M/s. Toshniwal…
- **Advocates:** Saurav…; SHASHANKA…; +3 more

## Timeline

- **May 11, 2015 — First Loan…**: M/s. Outlook Tracom Private Limited granted a loan of Rs. 50,00,000/- to M/s. Toshniwal…
- **August 4, 2016 — Second Loan…**: M/s. Outlook Tracom Private Limited granted a second loan of Rs. 50,00,000/- to M/s.…

## 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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