# In the matter of Alfavision Overseas (India) Private Limited

> NCLT judgment dated 2024-04-04. Citation: TCN-2024-NCLT-01835. Kanak Fairdeal (India) Private Limited filed an application under Section 7 of the Insolvency…

- **Court:** NCLT
- **Order date:** 4 Apr 2024
- **Citation:** TCN-2024-NCLT-01835
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/alfavision-overseas-india-private-limited-6864ebe0

## Summary

### Background

Kanak Fairdeal (India) Private Limited filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Alfavision Overseas (India) Limited. The applicant claimed a default amount of Rs. 6,50,69,301/-, comprising a principal amount of Rs. 1,50,00,000/- and interest of Rs. 5,00,69,301/-, with the date of default being 09.10.2015. The applicant contended that it had provided an unsecured loan to the respondent in 2013, which the respondent failed to repay. The respondent, however, argued that the amount was an advance for a land sale agreement that was not completed due to the applicant's director's breach, leading to forfeiture of the advance. A winding-up petition was initially

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## Facts

In 2013, Alfavision Overseas (India) Limited (the respondent) allegedly approached Kanak Fairdeal (India) Private Limited (the applicant) for an unsecured loan of Rs. 1,50,00,000. The applicant disbursed the amount in five installments of Rs. 30,00,000 each on 10.10.2013, with a 24% per annum interest rate. No formal agreement was executed. The applicant claims the respondent defaulted on 09.10.2015. The applicant issued a notice on 12.08.2016 requesting repayment. The respondent contends the Rs. 1,50,00,000 was an advance for a land sale agreement where Mr. Vinod Kumar Gupta, a director common to both companies, was to purchase land owned by the respondent. The respondent claims the applicant breached the agreement, forfeiting the advance. The applicant filed a

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## Issues and analysis

### Issue 1: Whether the amount of Rs. 6,50,69,301/- claimed by the applicant constitutes a 'financial debt' as …

**Ratio:** A 'financial debt' is defined under Section 5(8) of the IBC as a debt along with

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**Reasoning:** The NCLT found that there was no formal loan agreement between the parties. The financial

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**Interpretation:** The court interpreted Section 5(8) strictly, requiring clear evidence that the

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**Application:** Given the absence of a formal agreement, the conflicting accounting treatments,

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## Parties

- **Judges:** P. Moha…; KAUSHALENDRA…
- **Appellants:** Kanak Fairdeal…
- **Respondents:** Alfavision…; Alfavision…

## Timeline

- **2013-01-01 — Loan Disb…**: The applicant disbursed an…
- **2015-10-09 — Date of D…**: The respondent allegedly…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(8) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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