# In the matter of Tarapur Textile Park Limited C.P. No. 4076-IBC-MB-2018

> NCLT judgment dated 2022-12-05. Citation: TCN-2022-NCLT-00235. Awaita Properties Private Limited, the Financial Creditor, filed a petition under Section 7 of…

- **Court:** NCLT
- **Order date:** 5 Dec 2022
- **Citation:** TCN-2022-NCLT-00235
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/tarapur-textile-park-limited-cp-no-4076-ibc-mb-2018-68093e71

## Summary

### Background

Awaita Properties Private Limited, the Financial Creditor, filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Tarapur Textiles Park Limited, the Corporate Debtor, for a default amount of ₹8,56,30,137. This amount includes a principal of ₹5,00,00,000 and interest of ₹3,56,30,137 calculated at 15% per annum as of 30.09.2018. The Financial Creditor disbursed a loan of ₹5,00,00,000 to the Corporate Debtor for working capital in 2013-14, repayable on demand with 15% interest. The Financial Creditor repeatedly demanded repayment from February 2016, but the Corporate Debtor failed to pay. The Corporate Debtor argued that the Financial Creditor was to enter into a joint venture through SKIL Infrastructure Ltd. and that the Corporate Debtor

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## Facts

Awaita Properties Private Limited (Financial Creditor) disbursed a loan of ₹5,00,00,000 to Tarapur Textiles Park Limited (Corporate Debtor) in 2013-14 for working capital, repayable on demand with 15% interest per annum. The Financial Creditor demanded repayment from February 2016 onwards, but the Corporate Debtor failed to make any payments. A demand notice was issued on 20.02.2018. The Corporate Debtor claimed that the Financial Creditor was to enter into a joint venture through SKIL Infrastructure Ltd. for a project on land owned by the Corporate Debtor and that the Corporate Debtor incurred expenses and suffered losses due to this proposed venture. The Corporate Debtor circulated a draft MOU on 12.10.2013, but the MOU was never executed. The Financial Creditor

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## Issues and analysis

### Issue 1: Whether the amount claimed by the Financial Creditor is a financial debt and does the financial …

**Ratio:** A financial debt is a debt along with interest, if any, disbursed against the

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**Reasoning:** The NCLT relied on Section 5(7) and 5(8) of the IBC, along with the NCLAT's decision in

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**Interpretation:** The term 'financial debt' is interpreted broadly to include any debt disbursed

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**Application:** The NCLT applied the definition of 'financial debt' to the facts, noting that

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## Parties

- **Judges:** H.V. Subb…; ANURADHA SANJAY…
- **Appellants:** Awaita Properties…
- **Respondents:** Tarapur Textiles…
- **Advocates:** Ashish S.…; Simil Pu…

## Timeline

- **2013-14-01 — Loan Disbur…**: Awaita Properties Private Limited disbursed a loan of ₹5,00,00,000 to Tarapur Textiles…
- **2016-02-01 — Demand for Re…**: Awaita Properties Private Limited repeatedly demanded repayment of the loan from February…

## 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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