# 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-01263. 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-01263
- **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-2021-0f82b283

## 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, against APG Logistics Private Limited (Corporate Debtor) to initiate the Corporate Insolvency Resolution Process (CIRP). The Financial Creditors claimed a default based on a Share Purchase Agreement (SPA) where they infused funds into the Corporate Debtor. The Corporate Debtor opposed the application, arguing lack of pecuniary jurisdiction and disputing the existence of a 'financial debt'. The Corporate Debtor also filed IA(IBC)/256(CHE)/2022 challenging the maintainability of the application.

## Facts

Sanket Kumar Agarwal and Sanchit Kumar Agarwal (Financial Creditors) filed an application under Section 7 of the Insolvency & Bankruptcy Code, 2016, against APG Logistics Private Limited (Corporate Debtor). The Financial Creditors claimed that they had entered into a Share Purchase Agreement (SPA) with the Corporate Debtor's promoters to acquire 100% shareholding in the Group Companies. As per the SPA, the Financial Creditors were required to infuse Rs.1,00,00,000/- for share purchase and Rs.1,50,00,000/- to keep the company as a going concern. The Financial Creditors infused Rs.88,99,999/- into the Corporate Debtor. The Corporate Debtor later failed to sign an amendment agreement and undertook to repay the infused capital. The Corporate Debtor acknowledged the

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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 Share Purchase Agreement (SPA) did not set out any terms in relation to payment of

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**Interpretation:** The definition of 'financial debt' under Section 5(8) of the IBC requires a

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**Application:** In this case, the SPA stipulated that the infused funds were for business

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## Parties

- **Judges:** Ramalingam…; SAMEER…
- **Appellants:** Sanket Kumar…
- **Respondents:** APG Logistics…

## Timeline

- **2019-03-22 — Share Purchase…**: Financial Creditors entered into a Share Purchase Agreement with the Corporate Debtor's…
- **2019-03-01 — Infusion of…**: Financial Creditors infused Rs.88,99,999/- into the Corporate Debtor between March and…

## 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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