# In the matter of Growthways Trading Private Limited

> NCLT judgment dated 2024-02-05. Citation: TCN-2024-NCLT-02767. 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-02767
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/growthways-trading-private-limited-6235f670

## 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 the 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.

## Facts

M/s. Elite Steels Private Limited initiated insolvency proceedings against M/s. Growthways Trading Private Limited, leading to the appointment of Mr. Sunil Kumar Agrawal as the liquidator. Mrs. Nidhi Lamba, proprietor of M/s. Elite Enterprises, claimed to be a financial creditor, asserting that she had advanced funds to M/s. Growthways Trading Private Limited with an agreed interest rate. The total investment made was Rs. 1,18,54,036/-, out of which Rs. 51,98,388/- was received, leaving a balance of Rs. 66,55,648/- plus interest at 24%. The liquidator classified Mrs. Lamba as an operational creditor, based on the agreement between the parties, which indicated that M/s. Elite Enterprises provided structuring solutions to M/s. Growthways Trading Private Limited,

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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 definition of a Financial Creditor requires a strictly financial contract, such as a

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**Reasoning:** The court analyzed the agreement between the Appellant and the Corporate Debtor. The

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**Interpretation:** The court interpreted the agreement as a service agreement rather than a

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**Application:** The court applied the definition of Financial Creditor and Operational Creditor

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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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