# In the matter of Elegant I T Solutions Private Limited

> NCLT judgment dated 2024-01-10. Citation: TCN-2024-NCLT-03197. The application was filed by Mr. Sarish Kumar Chaudhry, the Applicant/Financial Creditor, under…

- **Court:** NCLT
- **Order date:** 10 Jan 2024
- **Citation:** TCN-2024-NCLT-03197
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/elegant-i-t-solutions-private-limited-19f473d4

## Summary

### Background

The application was filed by Mr. Sarish Kumar Chaudhry, the Applicant/Financial Creditor, under Section 7 of the Insolvency and Bankruptcy Code, 2016, read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s. Elegant IT Solutions Private Limited, the Respondent/Corporate Debtor. The Applicant claimed that the Corporate Debtor defaulted on a principal amount of Rs. 95,40,600/- and interest of Rs. 29,71,489/-, totaling Rs. 1,22,14,940/-. The Corporate Debtor contended that the Applicant is a related party under Section 5(24) of the IBC and that no demands were ever raised by the Applicant since 2012.

## Facts

Mr. Sarish Kumar Chaudhry filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate CIRP against M/s. Elegant IT Solutions Private Limited, claiming a default of Rs. 1,22,14,940/-. The Corporate Debtor argued that Mr. Chaudhry is a related party under Section 5(24) of the IBC, as he was a director controlling the company's affairs. The Corporate Debtor also contended that the application was incomplete, lacking a specific default date and necessary documents. The Corporate Debtor further stated that they are working to restore an IT Plot back to the company, with the Uttar Pradesh Government restoring the plot via order dated 2023-05-03. The Applicant filed a running ledger account for the period from 2012-04-01 to 2023-03-31, which

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## Issues and analysis

### Issue 1: Whether the Applicant is a related …

**Ratio:** Section 5(24) of the IBC defines 'related party' in relation to a corporate debtor to

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**Reasoning:** The Adjudicating Authority considered the factual position that the Applicant-Mr. Sarish

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**Interpretation:** The interpretation of Section 5(24) of the IBC is that if a person has been

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**Application:** The Adjudicating Authority applied the ratio to the facts of the case and

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## Parties

- **Judges:** BACHU VENKAT…; ATUL CHAT…
- **Appellants:** SARISH KUMAR…
- **Respondents:** Elegant IT…; M/s. ELEGANT IT…

## Timeline

- **2008-10-01 — Applicant Appointed as…**: Mr. Sarish Kumar Chaudhary was appointed as…
- **2022-05-04 — Applicant Resigned as…**: Mr. Sarish Kumar Chaudhary…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(24) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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