# In the matter of BJIRD Exim Private Limited

> NCLT judgment dated 2024-10-01. Citation: TCN-2024-NCLT-00514. Mobile Constructions Private Limited filed a petition under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 1 Oct 2024
- **Citation:** TCN-2024-NCLT-00514
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/bjird-exim-private-limited-9f07c547

## Summary

### Background

Mobile Constructions Private Limited filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Bjird Exim Private Limited, seeking to initiate Corporate Insolvency Resolution Process (CIRP) due to a default amount of Rs. 1,60,00,000/-. The Corporate Debtor allegedly approached the Petitioner in 2019 for financial assistance in the form of a loan, which was disbursed in tranches between 25.04.2019 and 02.05.2019. The Corporate Debtor allegedly defaulted on the principal amount and interest, with the debt becoming due and payable on 25th October 2019. The Financial Creditor issued demand notices on 20.07.2020 and 25.05.2023. The Corporate Debtor denied the liability, claiming the transaction was a friendly interest-free loan and that the

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## Facts

In 2019, Bjird Exim Private Limited (Corporate Debtor) sought financial assistance from Mobile Constructions Private Limited (Financial Creditor) for a loan of Rs. 1,60,00,000/-. The loan was disbursed in tranches between April 25, 2019, and May 2, 2019. The Corporate Debtor was supposed to pay interest at 12% per annum on a half-yearly basis and repay the principal within one year. The Corporate Debtor defaulted on the principal and interest, with the debt becoming due on October 25, 2019. The Financial Creditor issued demand notices on July 20, 2020, and May 25, 2023. The Corporate Debtor acknowledged the debt of Rs. 1,60,00,000/- in its Audit Report for the accounting year 2019-2020 under the head "Short-term borrowing." The Corporate Debtor claimed the

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## Issues and analysis

### Issue 1: Whether there is a debt and …

**Ratio:** Section 5(8) of the Insolvency and Bankruptcy Code defines 'Financial debt' as a debt

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**Reasoning:** The tribunal observed that the Corporate Debtor had acknowledged the debt in its balance

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**Interpretation:** The definition of 'Financial Debt' under Section 5(8) of the IBC is broad

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**Application:** In this case, the Corporate Debtor acknowledged the debt in its balance sheets,

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## Parties

- **Judges:** LAKSHMI G…; Charanjeet Singh…
- **Appellants:** Mobile Constructio…
- **Respondents:** Bjird Exim…

## Timeline

- **2019-04-25 — Disbursement…**: First tranche of loan disbursed by the…
- **2019-05-02 — Disbursement…**: Last tranche of loan disbursed by 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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