# In the matter of APG Logistics Private Limited IA(IBC)-256(CHE)-2022 in CP-IB-113(CHE)-2021

> NCLT judgment dated 2022-08-26. Citation: TCN-2022-NCLT-01247. The case involves an application filed by Sanket Kumar Agarwal and Sanchit Kumar Agarwal…

- **Court:** NCLT
- **Order date:** 26 Aug 2022
- **Citation:** TCN-2022-NCLT-01247
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/apg-logistics-private-limited-iaibc-256che-2022-in-cp-ib-113che-2021-07d7bcf7

## Summary

### Background

The case involves an application filed by Sanket Kumar Agarwal and Sanchit Kumar Agarwal (Financial Creditors) under Section 7 of the Insolvency & Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against APG Logistics Private Limited (Corporate Debtor). The Financial Creditors claimed default on a financial debt arising from a Share Purchase Agreement (SPA). The Corporate Debtor contested the application, primarily on the grounds of lack of pecuniary jurisdiction and disputing the existence of a 'financial debt'. The Financial Creditors had entered into a SPA with the promoters of the Corporate Debtor and other group companies, intending to acquire 100% shareholding. They infused funds into the Corporate Debtor, partly as share

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## Facts

Sanket Kumar Agarwal and Sanchit Kumar Agarwal (Financial Creditors) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against APG Logistics Private Limited (Corporate Debtor). The Financial Creditors claimed a default on a financial debt. The Financial Creditors and the Corporate Debtor had entered into a Share Purchase Agreement (SPA) dated 22.03.2019, where the Financial Creditors intended to acquire 100% shareholding of the Corporate Debtor and other group companies. The total share purchase consideration was Rs.1,00,00,000/-. In addition to the share purchase consideration, an additional sum of Rs.1,50,00,000/- was to be infused into the Corporate Debtor to keep it as a

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## Issues and analysis

### Issue 1: Whether the amount disbursed by the Applicant qualifies as a 'financial debt' under Section 5(8) of …

**Ratio:** A 'financial debt' requires terms relating to the payment of interest or repayment, which

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**Reasoning:** The Tribunal observed that the Share Purchase Agreement (SPA) did not set out any terms

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**Interpretation:** The term 'financial contract' is defined in clause (d) sub-section 1 of

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**Application:** In this case, the Share Purchase Agreement, which is the basis of the claim,

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## Parties

- **Judges:** Ramalingam…; SAMEER…
- **Appellants:** Sanket Kumar…
- **Respondents:** APG Logistics…
- **Advocates:** Gaurav…; Sriram Venkatavard…; +2 more

## Timeline

- **2019-03-22 — Share Purchase…**: Financial Creditors entered into a Share Purchase Agreement with the promoters of the…
- **2019-03-01 — Infusion of…**: Rs.88,99,999/- was infused into the…

## 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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