# In the matter of ATS IInfrastructure Limited IA-116-2023 And IB-574(ND)-2022

> NCLT judgment dated 2023-06-09. Citation: TCN-2023-NCLT-03011. The petition was filed under Section 7 of the IBC, 2016, on 2022-06-27, seeking to initiate…

- **Court:** NCLT
- **Order date:** 9 Jun 2023
- **Citation:** TCN-2023-NCLT-03011
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/ats-iinfrastructure-limited-ia-116-2023-and-ib-574nd-2022-15f021cf

## Summary

### Background

The petition was filed under Section 7 of the IBC, 2016, on 2022-06-27, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against ATS Infrastructure Limited, declare a moratorium, and appoint an Interim Resolution Professional. The applicant, Hardeep Singh, claimed default in payment of Rs. 66,005,000 as of 2021-08-12. The applicant contended that they advanced money to the corporate debtor in 2018 with the assurance of repayment. The corporate debtor, ATS Infrastructure Limited, opposed the petition, arguing that the transaction was a sale/purchase agreement and not a financial debt.

## Facts

Hardeep Singh (Financial Creditor) filed a petition under Section 7 of the IBC, 2016, against ATS Infrastructure Limited (Corporate Debtor) seeking initiation of CIRP for a default of Rs. 66,005,000 as of 2021-08-12. In 2018, the Financial Creditor advanced money to the Corporate Debtor, with an assurance of repayment. Umritha Infrastructure Development LLP allotted two units to the Financial Creditor, and a Buyer's Agreement was signed on 2018-05-21. The Financial Creditor paid Rs. 43,120,000 to Umritha Infrastructure. Simultaneously, a Memorandum of Understanding (MoU) was executed, detailing the repayment manner. The Corporate Debtor agreed to purchase the units for Rs. 57,900,000. A post-dated cheque was issued but later replaced with a fresh cheque for Rs.

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## Issues and analysis

### Issue 1: Whether the amount involved in the transaction between Hardeep Singh and ATS Infrastructure Limited …

**Ratio:** A 'Financial Debt' under Section 5(8) of the IBC means a debt along with interest, if

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**Reasoning:** The court reasoned that the clauses of the Buyer's Agreement and the MoU did not indicate

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**Interpretation:** The interpretation of 'Financial Debt' under Section 5(8) requires a clear

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**Application:** In this case, the court applied the definition of 'Financial Debt' to the facts

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## Parties

- **Judges:** BACHU VENKAT…; ATUL CHAT…
- **Appellants:** HARDEEP…
- **Respondents:** ATS INFRASTRUCTURE…; M/s. ATS INFRASTRU…

## Timeline

- **2016-01-01 — Enactment…**: The Insolvency and Bankruptcy…
- **2018-01-01 — Financial Creditor…**: The Financial Creditor advanced…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(7) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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