# In the matter of Codeblue Clothing Private Limited

> NCLT judgment dated 2023-12-21. Citation: TCN-2023-NCLT-00098. The application was filed on 2020-01-17 under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 21 Dec 2023
- **Citation:** TCN-2023-NCLT-00098
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/codeblue-clothing-private-limited-79690b5e

## Summary

### Background

The application was filed on 2020-01-17 under Section 7 of the Insolvency and Bankruptcy Code, 2016 by the Financial Creditor, Abhinav Agarwal, seeking initiation of the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, M/s Codeblue Clothing Pvt. Ltd. The application was filed due to the Corporate Debtor's failure to repay a financial debt of Rs. 49,14,584/-, which includes interest. The Corporate Debtor argued that the amount was not a loan but an investment, and the financial creditor failed to fulfill their commitment by not disbursing funds according to the mutually agreed-upon timelines. The Corporate Debtor also contended that the alleged transaction is an equity-based investment by the applicant with the intent of deriving profit from

…

## Facts

Abhinav Agarwal, the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of CIRP against Codeblue Clothing Pvt. Ltd., the Corporate Debtor. The application was based on a financial debt of Rs. 49,14,584/- including interest. The Financial Creditor claimed that he had advanced Rs. 35,00,000/- to the Corporate Debtor on 2018-08-31 and Rs. 10,00,000 on 2018-11-27. The date of default was mentioned as 2019-07-30. The Corporate Debtor argued that the amount was not a loan but an investment in their business. They contended that the Financial Creditor had failed to disburse funds according to the agreed timelines. The Corporate Debtor also stated that as per Section 73 of the Companies Act, 2013, a private

…

## Issues and analysis

### Issue 1: Whether there is a Financial Debt owed by the …

**Ratio:** A financial debt is a debt along with interest, if any, which is disbursed against the

…

**Reasoning:** The court found that the letter dated 2018-09-05 from the Corporate Debtor clearly stated

…

**Interpretation:** The court interpreted the letter dated 2018-09-05 as an acknowledgment of debt

…

**Application:** The court applied the definition of financial debt to the facts of the case and

…

## Parties

- **Judges:** Praveen…; Ashish…
- **Appellants:** Abhinav A…
- **Respondents:** Codeblue Clothing…; M/S Codeblue…

## Timeline

- **2010-06-08 — Incorporation of…**: M/s Codeblue Clothing Limited was incorporated under the provisions of the Companies Act,…
- **2018-08-31 — Loan Disbur…**: Financial Creditor advanced Rs.…

## 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)

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/codeblue-clothing-private-limited-79690b5e