# In the matter of Nagasuri Chitfunds Private Limited

> NCLT judgment dated 2024-04-01. Citation: TCN-2024-NCLT-01901. The case involves a company petition filed by Mr. Venkata Vara Prasad Kanumilli and Smt.…

- **Court:** NCLT
- **Order date:** 1 Apr 2024
- **Citation:** TCN-2024-NCLT-01901
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/nagasuri-chitfunds-private-limited-7c6bc2a7

## Summary

### Background

The case involves a company petition filed by Mr. Venkata Vara Prasad Kanumilli and Smt. Neeraja Kanumilli under Section 7 of the Insolvency & Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against M/s. Nagasuri Chit Funds Private Limited. The petitioners claimed non-payment of Rs. 6,80,00,000/- including interest, based on promissory notes and letters issued by the corporate debtor. The corporate debtor denied the averments, contending that it is a financial service provider and therefore not a 'corporate person' under the IBC. The corporate debtor also alleged that the promissory notes and letters were forged and fabricated.

## Facts

Mr. Venkata Vara Prasad Kanumilli and Smt. Neeraja Kanumilli filed a petition under Section 7 of the Insolvency & Bankruptcy Code, 2016, against M/s. Nagasuri Chit Funds Private Limited, alleging non-payment of Rs. 6,80,00,000/- including interest. The claim was based on promissory notes and letters dated 26.02.2020. The petitioners claimed that the corporate debtor, through its director K. Suryanarayana Raju, admitted to receiving amounts from them and executed promissory notes for repayment. The corporate debtor denied the averments, arguing that it is a financial service provider and not a 'corporate person' under the IBC. The corporate debtor also alleged that the promissory notes and letters were forged and fabricated. The petitioners had also filed a

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## Issues and analysis

### Issue 1: Whether a financial debt of a sum exceeding rupees one crore due and payable by the respondent to …

**Ratio:** A 'financial debt' under the IBC must be clearly established with proper documentation

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**Reasoning:** The court found that the promissory notes were executed by K. Suryanarayana Raju in his

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**Interpretation:** The court interpreted the requirements for establishing a financial debt under

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

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## Parties

- **Judges:** Venkata Ramakrishn…; SH. CHARAN…
- **Appellants:** Neeraja Kan…
- **Respondents:** Nagasuri Chit…

## Timeline

- **2020-02-26 — Letters I…**: Corporate Debtor allegedly issued…
- **2020-09-29 — FIR Regis…**: Financial Creditors approached…

## 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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