# In the matter of Growthways Trading Private Limited

> NCLT judgment dated 2024-02-05. Citation: TCN-2024-NCLT-02775. This Company Appeal was filed under Section 42 of the Insolvency and Bankruptcy Code, 2016, by…

- **Court:** NCLT
- **Order date:** 5 Feb 2024
- **Citation:** TCN-2024-NCLT-02775
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/growthways-trading-private-limited-2f345af9

## Summary

### Background

This Company Appeal was filed under Section 42 of the Insolvency and Bankruptcy Code, 2016, by Mrs. Nidhi Lamba, Proprietor of M/s. Elite Enterprises, against an order dated 30.12.2021 passed by the Liquidator. The appellant was treated as an Operational Creditor instead of a Financial Creditor. The appellant sought to set aside the order and be recognized as a Financial Creditor, claiming that the amount of Rs. 1,39,54,974/- had been accepted by the Respondent and there was no dispute regarding the admitted amount.

## Facts

Mrs. Nidhi Lamba, proprietor of M/s. Elite Enterprises, filed a Company Appeal against the liquidator's decision to classify her as an Operational Creditor instead of a Financial Creditor. M/s. Elite Steels Private Limited initiated insolvency proceedings against M/s. Growthways Trading Private Limited, the Corporate Debtor. The Adjudicating Authority admitted the insolvency application and appointed Mr. Sunil Kumar Agrawal as the Liquidator. Nidhi Lamba claimed to have invested Rs. 1,18,54,036/- in Growthways Trading Private Limited with an agreed interest rate of 24%, but the liquidator classified her as an Operational Creditor. The agreement between Elite Enterprises and Growthways Trading Private Limited involved providing structuring solutions for retail stores,

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## Issues and analysis

### Issue 1: Whether the Appellant, Mrs. Nidhi Lamba, should be classified as a Financial Creditor or an …

**Ratio:** The classification of a creditor as Financial or Operational depends on the nature of the

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**Reasoning:** The court reasoned that the agreement between the Appellant and the Corporate Debtor

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**Interpretation:** The court interpreted the definitions of Financial Creditor and Operational

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**Application:** The court applied the definitions to the facts, noting that the Appellant's

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## Parties

- **Judges:** BACHU VENKAT…; ATUL CHAT…
- **Appellants:** NIDHI L…
- **Respondents:** M/s. GROWTHWAYS…; Sunil Kumar…

## Timeline

- **2019-12-17 — Insolvency Application…**: The Adjudicating Authority admitted the Insolvency Application filed by M/s. Elite Steels…
- **2019-12-17 — Appointment of Interim…**: Appointment of Interim…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 42 — Appeal against the decision of liquidator](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-42)

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