# In the matter of Inteco Special Melting Technologies (India) Pvt. Ltd. Company Petition No. (IB)-549(ND)-2020

> NCLT judgment dated 2022-05-20. Citation: TCN-2022-NCLT-02687. The case pertains to a Company Petition filed under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 20 May 2022
- **Citation:** TCN-2022-NCLT-02687
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/inteco-special-melting-technologies-india-pvt-ltd-company-petition-no-ib-549nd-2-f529c1ba

## Summary

### Background

The case pertains to a Company Petition filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, by Ms. Sandhya Sethi & Anr. (Applicants/Financial Creditors) against M/s. Inteco Special Melting Technologies India Pvt. Ltd. (Respondent/Corporate Debtor). The applicants sought to initiate Corporate Insolvency Resolution Process (CIRP) against the respondent, alleging default on loan repayments. The respondent company raised objections, claiming it was solvent and the petition was a mala fide attempt to extort money. The applicants argued that the loans advanced were financial debts and the corporate debtor had acknowledged the debt in its books of accounts.

## Facts

Ms. Sandhya Sethi and another applicant, both shareholders of Inteco Special Melting Technologies India Pvt. Ltd., filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against the company. Applicant 1, also a former director, had arranged a loan of Rs. 15,00,000 to the company, while Applicant 2, also a former director, had provided loans that were partially repaid, leaving an outstanding balance of Rs. 14,36,840. The applicants claimed that the company defaulted on these loans, which constituted financial debt. The company, however, contested the petition, arguing that it was solvent, the debt was not a financial debt as defined under the IBC, and the application was a mala

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## Issues and analysis

### Issue 1: Whether the debt claimed by the applicants qualifies as a 'financial debt' under Section 5(8) of …

**Ratio:** The court relied on the judgment in 'Shailesh Sangani vs Joel Cardoso & Anr' which

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**Reasoning:** The court reasoned that the loans advanced by the applicants, who were directors and

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**Interpretation:** The interpretation of 'financial debt' under Section 5(8) of the IBC includes

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**Application:** The court applied the ratio to the facts of the case, noting that the loans

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## Parties

- **Judges:** Sh. Dharminder…; SUMITAPURKA…
- **Appellants:** Sandhya…
- **Respondents:** M/s. Inteco…

## Timeline

- **2012-04-13 — Incorporation of…**: The Respondent Company M/s. Inteco Special…
- **2018-12-29 — Loan Arrangement by…**: Applicant 1 arranged Rs. 15,00,000 from a third party and paid the amount to the…

## 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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