# In the matter of VS Omnitrade India Private Limited C.P. No. 670-MB-I&B-2021

> NCLT judgment dated 2022-10-14. Citation: TCN-2022-NCLT-00745. Tata Capital Financial Services Limited filed a petition under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 14 Oct 2022
- **Citation:** TCN-2022-NCLT-00745
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/vs-omnitrade-india-private-limited-cp-no-670-mb-ib-2021-6ac8422e

## Summary

### Background

Tata Capital Financial Services Limited filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against VS Omnitrade India Private Limited, seeking resolution of a financial debt amounting to Rs. 1,87,22,289.81/-. The petitioner, a non-banking financial company, claimed that the corporate debtor defaulted on repayment despite repeated follow-ups, leading to the issuance of a legal recovery notice. The corporate debtor failed to appear despite service of notice.

## Facts

Tata Capital Financial Services Limited (the Petitioner), a non-banking financial company, extended channel finance/inventory funding/trade advance facility of Rs. 2,00,00,000/- to VS Omnitrade India Private Limited (the Corporate Debtor) as per a sanction letter dated 28.07.2018. The Corporate Debtor also executed a Letter of Undertaking cum Indemnity and Affidavit dated 27.08.2018, creating a charge on its assets. The Corporate Debtor defaulted since March 2019, leading the Petitioner to issue a Legal Recovery notice dated 13.09.2019, demanding Rs. 1,87,22,289.81/-. The Petitioner filed a record of default with the Information Utility (NESL) dated 23.06.2021. The Corporate Debtor failed to appear despite service of notice on 26.07.2022, and the matter was heard ex

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## Issues and analysis

### Issue 1: Whether the nature of debt is a 'Financial Debt' as defined under section 5(8) of the Insolvency …

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

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**Reasoning:** The court considered the documents and submissions, concluding that the debt in question

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**Interpretation:** The interpretation of 'Financial Debt' under Section 5(8) requires the debt to

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**Application:** In this case, the court applied the definition of 'Financial Debt' to the

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## Parties

- **Judges:** H.V. Subb…; ANURADHA SANJAY…
- **Appellants:** Tata Capital…
- **Respondents:** VS Omnitrade…

## Timeline

- **2018-07-28 — Loan Sanction…**: Loan Sanction Letter…
- **2018-08-27 — Channel Finance…**: Corporate Debtor and Petitioner entered…

## 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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