# In the matter of Invent Bio-Med Private Limited

> NCLT judgment dated 2023-08-04. Citation: TCN-2023-NCLT-02157. The case involves a Company Petition filed under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 4 Aug 2023
- **Citation:** TCN-2023-NCLT-02157
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/invent-bio-med-private-limited-0314af78

## Summary

### Background

The case involves a Company Petition filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Invent Bio-Med Private Limited. The applicant, Prakash Ambure & Ors., claimed that the Corporate Debtor defaulted on a financial debt of Rs. 55,00,000/- with 18% interest from 01.11.2017. The Corporate Debtor argued that the petition was time-barred and the amount claimed was not a financial debt but share application money.

## Facts

In January 2015, the Managing Director of Invent Bio-Med Private Limited (Corporate Debtor) requested Prakash Ambure & Ors. (Financial Creditors) to invest money in the company due to financial stress. Between February and June 2015, the Financial Creditors advanced Rs. 55,00,000/- to the Corporate Debtor as an investment. The Corporate Debtor was supposed to issue equity shares against this investment. An email dated 09.09.2015 from the Corporate Debtor requested mandate letters from the Financial Creditors for the allocation of equity shares. The Corporate Debtor failed to issue the equity shares. On 21.12.2016, the Financial Creditor requested a refund of the deposits. The Corporate Debtor acknowledged its liability to refund the amount in its trial balance as

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## Issues and analysis

### Issue 1: Whether the amount advanced by the Financial Creditors to the Corporate Debtor constitutes a …

**Ratio:** According to Section 42(6) of the Companies Act, 2013, if a company fails to allot

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**Reasoning:** The Corporate Debtor failed to allot the equity shares against the investment made by the

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**Interpretation:** The interpretation of Section 42(6) of the Companies Act, 2013, and the

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**Application:** The amount was initially advanced as share application money. Since the shares

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## Parties

- **Judges:** Shyam Babu…; Kuldip Kumar…
- **Appellants:** Prakash A…
- **Respondents:** Invent Bio-Med…
- **Advocates:** Rubin P…; Rohit G…

## Timeline

- **2015-01-01 — Request for In…**: The Managing Director of the Corporate Debtor requested the Financial Creditors to invest…
- **2015-02-01 — Investment by Financial…**: Between February and June 2015, the Financial Creditors advanced Rs. 55,00,000/- 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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