# M/s. Jagannath Textile Company Private Limited vs. M/s. ShreeSatya Sponge & Power Private Limited

> NCLT judgment dated 2026-09-23. Citation: TCN-2026-NCLT-01075. M/s. Jagannath Textile Company Private Limited (Financial Creditor/Applicant) filed an…

- **Court:** NCLT
- **Order date:** 23 Sept 2026
- **Citation:** TCN-2026-NCLT-01075
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-kolkata/ms-jagannath-textile-company-private-limited-vs-ms-shreesatya-sponge-power-priva-2fug7

## Summary

### Background

M/s. Jagannath Textile Company Private Limited (Financial Creditor/Applicant) filed an application under Section 7 of the IBC against M/s. ShreeSatya Sponge & Power Private Limited (Corporate Debtor/Respondent) for initiating CIRP due to an alleged default of Rs. 1,09,56,712/-. The Financial Creditor had disbursed an unsecured loan of Rs. 1,00,00,000/- to the Corporate Debtor in July 2025, with an agreed interest rate of 12% per annum. The Corporate Debtor issued a money receipt and a post-dated cheque for repayment, which was later dishonoured. The Corporate Debtor disputed the nature of the debt, the maintainability of the application based on the pecuniary threshold, and the validity of the NeSL record.

## Facts

M/s. Jagannath Textile Company Private Limited (Financial Creditor) filed an application under Section 7 of the IBC against M/s. ShreeSatya Sponge & Power Private Limited (Corporate Debtor).

The application seeks initiation of Corporate Insolvency Resolution Process (CIRP) for an alleged default of Rs. 1,09,56,712/-.

In July 2025, the Corporate Debtor approached the Financial Creditor through a broker, Mr. Shyam Sundar Nadhani, seeking an unsecured loan of Rs. 1,00,00,000/- for working capital.

The loan was for a period of three months at an interest rate of 12% per annum.

On 11.07.2025, the Financial Creditor disbursed Rs. 1,00,00,000/- to the Corporate Debtor's bank account via RTGS.

…

## Issues and analysis

### Issue 1: Whether the disbursement of funds without a formal loan agreement constitutes a Financial Debt …

**Ratio:** For a debt to be a 'financial debt' under Section 5(8) of the IBC, it must be a disbursal

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**Reasoning:** The Supreme Court in Anuj Jain IRP for Jaypee Infratech Ltd. v. Axis Bank Ltd.

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**Interpretation:** Section 5(8) of the IBC defines "financial debt" to include money

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**Application:** In this case, funds were disbursed with a specific interest rate of 12% for

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## Parties

- **Judges:** BIDISHA BA…; Rekha Kantilal…
- **Appellants:** M/s. Jagannath…
- **Respondents:** M/s. ShreeSatya…
- **Other parties:** Committee of…; Pratim…
- **Advocates:** Manoj Gopalakrishn…; Kiran S…; +3 more

## Timeline

- **1987-05-11 — Financial Creditor…**: M/s. Jagannath Textile Company Private Limited was originally incorporated as a Public…
- **2013 — Financial Creditor…**: M/s. Jagannath Textile Company Private Limited converted into a Private Limited Company…

## 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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