# In the matter of Apnaghar Builders Pvt. Ltd. Vs Intense Fitness And Spa Private Limited & Ors.

> NCLAT judgment dated 2024-11-28. Citation: TCN-2024-NCLAT-00054. The case involves an appeal against the order dated 02.08.2022 passed by the National Company…

- **Court:** NCLAT
- **Order date:** 28 Nov 2024
- **Citation:** TCN-2024-NCLAT-00054
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/apnaghar-builders-pvt-ltd-vs-intense-fitness-and-spa-private-limited-ors-d0f503c2

## Summary

### Background

The case involves an appeal against the order dated 02.08.2022 passed by the National Company Law Tribunal (NCLT), New Delhi, which admitted an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, initiating the Corporate Insolvency Resolution Process (CIRP) against Intense Fitness & Spa Pvt. Ltd. The application was filed by CVR Holdings Pvt. Ltd., the financial creditor, alleging default on a loan originally availed from Navayuga Engineering Company Ltd. and subsequently assigned to CVR Holdings. The appellant, Apnaghar Builders Pvt. Ltd., challenged the NCLT order, claiming collusion between the respondents to circumvent proceedings initiated by the appellant against Intense Fitness & Spa Pvt. Ltd. for non-payment of rent. The appellant

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## Facts

Apnaghar Builders Pvt. Ltd. (Appellant) leased a property to Intense Fitness & Spa Pvt. Ltd. (Respondent No. 1/Corporate Debtor). Respondent No. 1 defaulted on rent payments from 01.11.2018. The Appellant filed CP No. 1754/ND/2019 under Section 9 of the IBC, which was dismissed on 18.03.2020 because the lease rent was not considered an operational debt. Respondent No. 1 filed a civil suit (CS (OS) 667/2019) against the Appellant for Rs. 7,63,08,336/-. The Appellant filed a suit (CS (OS) 164/2020) against Respondent No. 1 for possession and recovery of arrears. The Appellant obtained a decree for possession on 19.04.2022. CVR Holdings Pvt. Ltd. (Respondent No. 2/Financial Creditor) filed CP (IB) No. 228/ND/2022 under Section 7 of the IBC against Respondent No. 1,

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 was filed …

**Ratio:** CIRP can be set aside if collusion is proved, even if the ingredients of Section 7 of the

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**Reasoning:** The court observed that Respondent No. 1 did not contest the Section 7 application, and

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**Interpretation:** Collusion implies a secret agreement or cooperation for fraudulent or deceitful

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**Application:** The court applied the ratio to the facts by examining the shareholding

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## Parties

- **Judges:** Rakesh Kuma…; Naresh Sa…; +1 more
- **Appellants:** Apnaghar Builders…
- **Respondents:** Intense Fitness &…

## Timeline

- **2016-01-04 — Lease Agr…**: Registered lease agreement between Apnaghar Builders Pvt. Ltd. and Intense Fitness & Spa…
- **2018-11-01 — Default in Ren…**: Intense Fitness & Spa Pvt. Ltd. defaulted…

## 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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