# In the matter of I world Business Pvt. Ltd. (IB) 355(ND)-2021

> NCLT judgment dated 2022-01-31. Citation: TCN-2022-NCLT-04323. The case involves an application under Section 7 of the Insolvency and Bankruptcy Code (IBC),…

- **Court:** NCLT
- **Order date:** 31 Jan 2022
- **Citation:** TCN-2022-NCLT-04323
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/i-world-business-pvt-ltd-ib-355nd-2021-d88028a0

## Summary

### Background

The case involves an application under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, filed by M/S Vintage Footwear Private Ltd. (Operational Creditor) against I World Business Solutions Pvt Ltd (Corporate Debtor). The matter concerns a promissory note and whether the amount claimed under it qualifies as a 'financial debt' under the IBC. The applicant seeks initiation of the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor based on the alleged default in payment of the debt.

## Facts

M/S Vintage Footwear Private Ltd. (Operational Creditor) filed an application under Section 7 of the IBC, 2016, against I World Business Solutions Pvt Ltd (Corporate Debtor). The application is based on a promissory note. The applicant claims that the Corporate Debtor defaulted in payment of the amount due under the promissory note. The applicant's counsel submitted that the Corporate Debtor acknowledged the debt in its balance sheet as of March 31, 2020, for Rs. 1,77,46,750/-. The Corporate Debtor had issued two cheques, one for Rs. 1 crore and another for Rs. 75 lakhs, both dated February 4, 2021, which were dishonored due to insufficient funds. The applicant's counsel argued that the promissory note falls under the definition of 'financial debt' as per Section 5(8)

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## Issues and analysis

### Issue 1: Whether the amount claimed under the Promissory Note comes under the definition of Financial Debt …

**Ratio:** Section 5(8) of the IBC, 2016 defines 'financial debt' as a debt along with interest, if

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**Reasoning:** The court considered the definition of 'Promissory Note' under Section 4 of the

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**Interpretation:** The court interpreted Section 5(8) of the IBC, 2016, to include amounts raised

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**Application:** The court applied the definition of 'financial debt' to the facts of the case,

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## Parties

- **Judges:** ABNI RANJAN KUMAR…; AVINASH K.…
- **Appellants:** M/S VINTAGE…
- **Respondents:** I World Business…

## Timeline

- **2022-01-04 — Hearing…**: The matter was heard and reserved for orders on the point of issuance of notice upon the…
- **2020-03-31 — Debt Acknowl…**: The Corporate Debtor acknowledged the debt in its balance sheet as of this date for Rs.…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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