# In the matter of Rathod Pharmachem Private Limited CP (IB) 110-NCLT-AHM-2021

> NCLT judgment dated 2022-12-23. Citation: TCN-2022-NCLT-00034. Naman Global Impex Private Limited filed an application under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 23 Dec 2022
- **Citation:** TCN-2022-NCLT-00034
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/rathod-pharmachem-private-limited-cp-ib-110-nclt-ahm-2021-f7e0ef4b

## Summary

### Background

Naman Global Impex Private Limited filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against Rathod Pharmachem Private Limited. The applicant claimed that Rs. 1.00 crore was paid to the corporate debtor as equity share application money, but the shares were not allotted, and the amount was not refunded. The applicant contended that this constituted a financial debt, entitling them to initiate CIRP. The corporate debtor argued that the amount was not intended as equity, no share application form was signed, and the applicant failed to provide additional funds as promised, leading to project delays.

## Facts

Naman Global Impex Private Limited (the applicant) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Rathod Pharmachem Private Limited (the corporate debtor). The applicant claimed to have paid Rs. 1.00 crore to the corporate debtor on 11.11.2020 as equity share application money. The shares were not allotted, and the amount was not refunded. The applicant claimed an entitlement to Rs. 1,04,99,726/- including interest at 12% per annum. The corporate debtor contended that the amount was not intended as equity, the applicant never signed the share application form, and the applicant failed to provide additional funds as promised. The corporate debtor argued that the applicant is not a financial creditor and the debt is not a

…

## Issues and analysis

### Issue 1: Whether the amount paid by the applicant to the corporate debtor as share application money, …

**Ratio:** Share application money, in the absence of allotment of shares, does not fall under the

…

**Reasoning:** The NCLT relied on the decisions of the NCLAT and NCLT in similar cases, specifically

…

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

…

**Application:** In this case, the applicant paid Rs. 1.00 crore as share application money, but

…

## Parties

- **Judges:** DEEPTI M…; Ajai Das Me…
- **Appellants:** Naman Global…
- **Respondents:** Rathod Pharmachem…

## Timeline

- **2020-11-11 — Payment of Share…**: The applicant, Naman Global Impex Private Limited, paid Rs. 1.00 crore to the corporate…
- **2021-06-19 — Date of D…**: The corporate debtor allegedly defaulted on its obligation to allot shares or refund the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(7) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/rathod-pharmachem-private-limited-cp-ib-110-nclt-ahm-2021-f7e0ef4b