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

> NCLT judgment dated 2022-05-06. Citation: TCN-2022-NCLT-02841. 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-02841
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/dar-media-private-limited-cp-ib-299-mb-2020-3a9cab19

## 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, to initiate Corporate Insolvency Resolution Process (CIRP) against Dar Media Private Limited, the Corporate Debtor (CD), for non-payment of outstanding dues. The FC claimed to have advanced a loan of Rs. 2,00,00,000/- to the CD, which the CD failed to repay along with accrued interest. The FC initiated the petition after the CD defaulted on the repayment.

## 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 with 18% p.a. interest, increasing to 24% p.a. on delayed payments. The loan was disbursed on 2015-04-23. The CD acknowledged the debt via an affidavit dated 2015-04-23. The CD failed to repay the principal and accrued interest, with an outstanding amount of Rs. 4,32,21,758/- as of 2019-12-31, including Rs. 1,38,70,000/- towards principal. The CD confirmed the debt on 2018-04-01. The FC recalled the loan on 2016-04-03. The FC issued a demand notice on 2019-11-23. The CD's counsel did not object to the petition's admission and admitted the default. The last payment of Rs.30,00,000/- was done by CD on 2017-01-24. The FC filed the petition on 2020-01-15.

## 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 court considered the loan agreement and disbursement details, concluding that 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, falls

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## Parties

- **Judges:** P.N. Des…; K.K. V…
- **Appellants:** Speed-O-Controls…
- **Respondents:** Dar Media Private…

## 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…**: 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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