# In the matter of Unimers India Limited CP No. (IB) 604-MB-2018

> NCLT judgment dated 2022-11-18. Citation: TCN-2022-NCLT-00403. Gill International Limited, the Financial Creditor, filed a Company Petition under Section 7 of…

- **Court:** NCLT
- **Order date:** 18 Nov 2022
- **Citation:** TCN-2022-NCLT-00403
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/unimers-india-limited-cp-no-ib-604-mb-2018-13d3f44c

## Summary

### Background

Gill International Limited, the Financial Creditor, filed a Company Petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Unimers India Limited, the Corporate Debtor, for defaulting on payments. The petition was based on a Financing Agreement dated June 11, 2007, for inter-corporate loans/advances, and a subsequent Memorandum of Understanding (MoU) dated March 10, 2010, to resolve disputes. The Financial Creditor claimed a total outstanding amount of Rs. 13,47,19,402/- as of March 23, 2018, including principal and interest. The Corporate Debtor argued that the initial agreement was a Sale Purchase Agreement, not a Financing Agreement, and that the petition was not maintainable

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## Facts

Gill International Limited (GIL), the Financial Creditor, sought to initiate Corporate Insolvency Resolution Process (CIRP) against Unimers India Limited (UIL), the Corporate Debtor, alleging default in payment. A Financing Agreement dated June 11, 2007, was entered into between GIL and UIL for inter-corporate loans/advances, where GIL agreed to advance Rs. 195 Lakhs as advance and Rs. 30 Lakhs as a loan for outstanding transportation charges, totaling Rs. 225 Lakhs, payable within 6 months with 18% interest per annum. Disputes arose, leading to a Memorandum of Understanding (MoU) dated March 10, 2010, where UIL was liable to pay a lump sum of Rs. 650 Lakhs to GIL. UIL made staggered payments, with the last payment on April 30, 2012, leaving an outstanding amount. GIL

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## Issues and analysis

### Issue 1: Whether the debt in question can be …

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

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**Reasoning:** The NCLT reasoned that the principal amount was advanced with a clear agreement on the

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**Interpretation:** The interpretation of 'financial debt' under Section 5(8) of the IBC requires

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**Application:** In this case, the NCLT found that the amount advanced by the Financial Creditor

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## Parties

- **Judges:** P.N. Des…; Shyam Babu…
- **Appellants:** Gill International…
- **Respondents:** Unimers India…

## Timeline

- **2007-06-11 — Financing Ag…**: Gill International Limited and Unimers India Limited entered into a Financing Agreement…
- **2010-03-10 — Memorandum of…**: Parties executed a Memorandum of…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(8) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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