Sidfwandan Finance Appeals NCLT Section 7 Dismissal

Authority: National Company Law Appellate Tribunal Principal Bench, New Delhi

Order Date: 27 July 2026

Case Overview

This appeal challenges the impugned order dated 21 March 2025 passed by the National Company Law Tribunal (NCLT), Court V, New Delhi, which dismissed the Appellant's petition under Section 7 of the Insolvency and Bankruptcy Code (IBC). The NCLT dismissed the petition on the grounds that the debt in question does not qualify as a financial debt under the IBC.

The Appellant, Sidfwandan Finance Ltd. (formerly Jatalia Finance Company Ltd.), alleged that the debt represented a loan amount granted to the Respondent, Adonia Systems Pvt. Ltd., on interest. The Appellant presented evidence including TDS certificates showing interest payments had been made, financial information Form-C from NeSL (National E-Governance Services Limited), and bank statements showing interest credits to the Appellant's account.

The NCLT's dismissal was based on two key findings: (1) the loan agreement filed by the Appellant was signed only by the Appellant and not by the Respondent, and (2) the Respondent placed on record a sale and purchase agreement, suggesting the transaction was commercial rather than financial in nature.

The Appellant contends that the sale and purchase agreement presented by the Respondent is forged, citing as evidence the stamp paper originally obtained for the execution of the loan agreement. The Appellant maintains this was purely a loan transaction.

Final Outcome

The NCLAT admitted the appeal and issued notice to the Respondent. The Respondent's counsel was present and accepted notice. The tribunal directed the Respondent to file a reply to the appeal within four weeks, with the Appellant given a subsequent four weeks to file a rejoinder if necessary. The appeal has been listed for further hearing on 23 September 2026. The tribunal's order represents a procedural step allowing the appeal to proceed for fuller consideration of the evidence regarding the nature of the debt.

Topics: IBC Section 7, Financial Debt Dispute