# In the matter of Pytex Jewellers Private Limited Company Petition No.(IB)60(PB)-2021

> NCLT judgment dated 2022-07-12. Citation: TCN-2022-NCLT-01751. Essbert Fashion Private Limited, along with other financial creditors, filed an application…

- **Court:** NCLT
- **Order date:** 12 Jul 2022
- **Citation:** TCN-2022-NCLT-01751
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/pytex-jewellers-private-limited-company-petition-noib60pb-2021-a98f8b16

## Summary

### Background

Essbert Fashion Private Limited, along with other financial creditors, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Pytex Jewellers Private Limited. The application was based on the alleged default in repayment of financial facilities availed by Pytex Jewellers Private Limited.

## Facts

Essbert Fashion Private Limited, along with other financial creditors including Sobhagya Enterprises Private Limited, Ekambar Enterprises Private Limited, and Albatross Homes Private Limited, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Pytex Jewellers Private Limited. The financial creditors claimed that Pytex Jewellers Private Limited had availed financial facilities amounting to Rs. 3,66,61,212, out of which Rs. 15,00,000 had been repaid, leaving a principal amount of Rs. 2,95,00,000 outstanding as of 11.02.2019. The corporate debtor, Pytex Jewellers Private Limited, objected to the petition, arguing that the debt claimed was not a financial debt, the applicant

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## Issues and analysis

### Issue 1: Whether the debt claimed by the applicant qualifies as a 'financial debt' under Section 5 of the …

**Ratio:** Section 5(8) of the Insolvency and Bankruptcy Code defines 'financial debt' as a debt

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**Reasoning:** The court reasoned that the loan was disbursed against the payment of interest and

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**Interpretation:** The court interpreted Section 5(8) to mean that any debt disbursed with the

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

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## Parties

- **Judges:** Sh. Dharminder…; BINOD KUMAR…
- **Appellants:** Essbert Fashion…
- **Respondents:** Pytex Jewellers…

## Timeline

- **2019-02-11 — First Legal…**: First legal notices sent to the Corporate…
- **2019-02-21 — Reply by Corporate…**: Reply by the corporate debtor in response…

## 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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