# In the matter of Wianxx Impex Pvt. Ltd. (IB) 975 (ND)-2018

> NCLT judgment dated 2019-01-02. Citation: TCN-2019-NCLT-05345. The petition was filed under Section 7 of the Insolvency & Bankruptcy Code, 2016, for…

- **Court:** NCLT
- **Order date:** 2 Jan 2019
- **Citation:** TCN-2019-NCLT-05345
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/wianxx-impex-pvt-ltd-ib-975-nd-2018-041528bb

## Summary

### Background

The petition was filed under Section 7 of the Insolvency & Bankruptcy Code, 2016, for initiating Corporate Insolvency Resolution Process against Wianxx Impex Pvt. Ltd. The petitioner, Sapan Mohan Garg (HUF), claimed that the corporate debtor was unable to liquidate its financial debt. The corporate debtor had taken a loan of Rs. 50 lakhs in August 2013, with an interest rate of 2.5% per month. A Memorandum of Understanding (MOU) was executed on 17.08.2013. The corporate debtor also issued an allotment letter earmarking a property as security. The corporate debtor failed to pay the agreed interest and requested a lower rate of 9% p.a., which was agreed upon. A Corporate Loan Agreement was entered on 19.09.2014. The corporate debtor issued a cheque of Rs. 50 Lacs

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## Facts

Sapan Mohan Garg (HUF) filed a petition under Section 7 of the Insolvency & Bankruptcy Code, 2016, against Wianxx Impex Pvt. Ltd. seeking initiation of CIRP. The Corporate Debtor had taken a loan of Rs. 50 lakhs in August 2013 at 2.5% interest per month, evidenced by an MOU dated 17.08.2013. The Corporate Debtor provided security in the form of an allotment letter for a property. The Corporate Debtor failed to pay the agreed interest and requested a lower rate of 9% p.a., which was agreed upon via a Corporate Loan Agreement dated 19.09.2014. The Corporate Debtor issued a cheque of Rs. 50 Lacs dated 19.08.2015. The Corporate Debtor made payments towards interest between January and March 2015 but defaulted thereafter. The security offered was already mortgaged to

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## Issues and analysis

### Issue 1: Whether the applicant, being an HUF, falls within the definition of a financial creditor under the …

**Ratio:** An HUF, being a distinct entity as an individual, is entitled to initiate CIR proceedings

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**Reasoning:** The court stated that the Code does not disregard claims made by an HUF, which in itself

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**Interpretation:** The interpretation is that an HUF is recognized as a separate legal entity

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**Application:** The court applied this principle to the facts, stating that the financial claim

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## Parties

- **Judges:** Ina Mal…; DeepaKr…
- **Appellants:** Sapan Mohan Garg…
- **Respondents:** Wianxx Impex Pvt.…
- **Advocates:** Dhir & Dhir…; Rajat Bha…

## Timeline

- **2013-08-01 — Loan Adv…**: The financial creditor advanced a loan of…
- **2013-08-17 — MOU Exec…**: A Memorandum of Understanding (MOU)…

## 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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