# In the matter of Super Forgings & Steels Limited

> NCLT judgment dated 2024-01-01. Citation: TCN-2024-NCLT-03379. The case pertains to an application filed under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 1 Jan 2024
- **Citation:** TCN-2024-NCLT-03379
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/super-forgings-steels-limited-a665c58f

## Summary

### Background

The case pertains to an application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, by Techon Commercial Private Limited (Financial Creditor) against Super Forgings & Steels Limited (Corporate Debtor) seeking initiation of Corporate Insolvency Resolution Process (CIRP). The Financial Creditor had granted a loan to the Corporate Debtor, and the application was filed due to default in repayment. The Corporate Debtor acknowledged the debt but cited financial difficulties due to the COVID-19 pandemic as the reason for the default.

## Facts

Techon Commercial Private Limited, the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Super Forgings & Steels Limited, the Corporate Debtor, due to default in repayment of a loan. The total debt granted was Rs. 6,52,50,000/-, and the total amount claimed to be in default was Rs. 7,49,20,456/-, including principal and interest. The date of default was claimed as 01.04.2023. The Corporate Debtor had approached the Financial Creditor for an unsecured loan between Rs. 7 Crore and Rs. 8 Crore, which was approved by the Financial Creditor's Board of Directors on 26.05.2016. An agreement was executed on 19.09.2016, where the Financial Creditor advanced Rs. 25 Lakh, with a maximum loan amount of Rs. 8 Crore.

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## Issues and analysis

### Issue 1: Whether the Inter-Corporate Deposit (ICD) can be considered a 'financial debt' under Section 5(8) …

**Ratio:** An Inter-Corporate Deposit (ICD) can be considered a financial debt within the ambit of

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**Reasoning:** The court relied on precedents, including Seaview Merchants Private Limited v. Ashish

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**Interpretation:** Section 5(8) of the I&B Code defines 'financial debt' as a debt along with

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**Application:** In this case, the court found that the loan granted to the Corporate Debtor was

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## Parties

- **Judges:** BIDISHA BA…; D. Ar…
- **Appellants:** Techon Commercial…
- **Respondents:** Super Forgings &…

## Timeline

- **2016-04-30 — Corporate Debtor…**: The Corporate Debtor approached the Financial Creditor for an unsecured loan between Rs.…
- **2016-05-26 — Board Resolution of…**: The Board of Directors of the Financial Creditor approved the request of the Corporate…

## 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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