# In the matter of Dar Media Private Limited CP (IB) 299-MB-2020

> NCLT judgment dated 2022-05-06. Citation: TCN-2022-NCLT-02836. Speed-O-Controls Private Limited, the Financial Creditor (FC), filed a Company Petition under…

- **Court:** NCLT
- **Order date:** 6 May 2022
- **Citation:** TCN-2022-NCLT-02836
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/dar-media-private-limited-cp-ib-299-mb-2020-081d79f0

## Summary

### Background

Speed-O-Controls Private Limited, the Financial Creditor (FC), filed a Company Petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Dar Media Private Limited, the Corporate Debtor (CD), for non-payment of outstanding dues. The FC is a private limited company incorporated under the Companies Act, 1956. A scheme amalgamation of Stromag Engineers Ltd with Speed-O-Controls Private Limited was sanctioned by the Bombay High Court on 29.09.2016.

## Facts

Speed-O-Controls Private Limited (FC) advanced a loan of Rs. 2,00,00,000/- to Dar Media Private Limited (CD) for 90 days at 18% p.a. interest, increasing to 24% p.a. on delayed payments. The loan was disbursed on 23.04.2015, evidenced by bank records. The CD acknowledged the loan via an affidavit on 23.04.2015. The CD failed to repay the principal and interest, resulting in an outstanding amount of Rs. 4,32,21,758/- as of 31.12.2019. The CD confirmed the debt on 01.04.2018. The FC recalled the loan on 04.03.2016 and issued a demand notice on 23.11.2019. The CD's counsel admitted to the default and did not object to the petition's admission. The FC filed the petition on 15.01.2020, within the limitation period, considering a repayment of Rs. 30,00,000/- on 24.01.2017.

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## Issues and analysis

### Issue 1: Whether the debt in question qualifies as a 'Financial Debt' under Section 5(8) of the Insolvency …

**Ratio:** A 'Financial Debt' is defined under Section 5(8) of the Code as a debt along with

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**Reasoning:** The NCLT considered the loan agreement, disbursement details, and the affidavit from the

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**Interpretation:** Section 5(8) is interpreted to include any debt disbursed for the time value of

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**Application:** The loan advanced by the FC to the CD, with a specified interest rate and

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## Parties

- **Judges:** P.N. Des…; K.K. V…
- **Appellants:** Speed-O-Controls…
- **Respondents:** Dar Media Private…
- **Advocates:** Amey Ha…; Geeta Lun…; +1 more

## Timeline

- **2015-04-23 — Loan Disbur…**: Speed-O-Controls Private Limited disbursed a loan of Rs. 2,00,00,000/- to Dar Media…
- **2015-04-23 — Affidavit by Corporate…**: Dar Media Private Limited provided an…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(8) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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