# In the matter of Vcan Active Carbon Pvt. Ltd. CP-1300-IB-2018

> NCLT judgment dated 2019-01-30. Citation: TCN-2019-NCLT-05112. The case involves a Company Petition filed under Section 7 of the Insolvency & Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 30 Jan 2019
- **Citation:** TCN-2019-NCLT-05112
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/vcan-active-carbon-pvt-ltd-cp-1300-ib-2018-1914e1d2

## Summary

### Background

The case involves a Company Petition filed under Section 7 of the Insolvency & Bankruptcy Code, 2016, by the petitioner against the Corporate Debtor. The petitioner claimed that the Corporate Debtor defaulted in allotting shares against a share application money of ₹70 Lakhs, leading the petitioner to seek initiation of CIRP against the Corporate Debtor.

## Facts

The petitioner, Gurminder Singh, filed a Company Petition against VCAN Active Carbon Pvt Ltd under Section 7 of the Insolvency & Bankruptcy Code, 2016. The petitioner claimed that the Corporate Debtor defaulted on allotting shares against a share application money of ₹70 Lakhs. The petitioner sought initiation of CIRP against the Corporate Debtor, treating the unallotted share application money as a financial debt. The court noted that the money was advanced as share application money and not as a loan. The Corporate Debtor allegedly agreed to return the money, but the court found that this did not constitute a financial debt under Section 5(8) of the IBC.

## Issues and analysis

### Issue 1: Whether the share application money advanced by the petitioner to the Corporate Debtor can be …

**Ratio:** The legal principle applied is that a financial debt, as defined under Section 5(8) of

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**Reasoning:** The court reasoned that the petitioner's own showing indicated that the money was

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**Interpretation:** The interpretation of Section 5(8) of the IBC is that it specifically covers

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**Application:** In this case, the court applied the principle that the money advanced was for

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## Parties

- **Judges:** B.S.V. Prakash…; S. VIJAYARA…
- **Appellants:** GURMINDER…
- **Respondents:** VCAN ACTIVE…

## Timeline

- **2018-01-01 — Petition…**: CP/1300/IB/2018 filed by Gurminder Singh…
- **2019-01-30 — Order Da…**: Order passed dismissing…

## 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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