# In the matter of Harish Raghavji Patel vs. Clear Water Capital Partners Singapore Fund IV Private Limited

> NCLAT judgment dated 2023-12-21. Citation: TCN-2023-NCLAT-00014. This is an appeal against an order dated 24th March, 2023, passed by the National Company Law…

- **Court:** NCLAT
- **Order date:** 21 Dec 2023
- **Citation:** TCN-2023-NCLAT-00014
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/harish-raghavji-patel-vs-clear-water-capital-partners-singapore-fund-iv-private-fb68d52f

## Summary

### Background

This is an appeal against an order dated 24th March, 2023, passed by the National Company Law Tribunal (NCLT), Mumbai Bench, Court III, which admitted a Section 7 application under the Insolvency and Bankruptcy Code, 2016 (IBC). The application was filed by Clearwater Capital Partners Singapore Fund IV Private Limited and Clearwater Capital Partners Singapore Fund V Private Limited, the Financial Creditors, against Rajesh Estates and Nirman Private Limited, the Corporate Debtor. The Corporate Debtor argued that the application was barred by Section 10A of the IBC and that the Financial Creditors, being minority debenture holders, did not have the right to file the Section 7 application. The NCLT rejected these submissions and admitted the application.

## Facts

The case involves an appeal against the admission of a Section 7 application under the IBC by the NCLT Mumbai. Vistara ITCL Limited (Debenture Trustee) and Rajesh Estates and Nirman Private Limited (Corporate Debtor) entered into a Debenture Trust Deed (DTD). The Corporate Debtor issued Non-Convertible Debentures (NCDs) of Rs. 432 Crores, with Financial Creditors (Clearwater Capital Partners Singapore Fund IV & V Private Limited) subscribing to Rs. 129 Crores (29.8%). According to the DTD, the principal amount was due on December 31, 2020. The Corporate Debtor failed to make the payment. The Financial Creditors issued Facility Acceleration Notices on May 30 and 31, 2021, citing overdue amounts. The Financial Creditors then filed a Section 7 application claiming Rs.

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## Issues and analysis

### Issue 1: Whether the Application filed by the Financial Creditors under Section 7 of the Code was hit by …

**Ratio:** An application under Section 7 cannot be initiated for defaults committed during the

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**Reasoning:** The Adjudicating Authority repelled the submission of the Corporate Debtor that the

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**Interpretation:** Section 10A of the IBC provides a bar on initiating corporate insolvency

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**Application:** The court found that even if the date of default as per the Facility

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## Parties

- **Judges:** Ashok Bh…; Barun M…
- **Appellants:** Harish Raghavji…
- **Respondents:** Rajesh Estates…; Clearwater…
- **Advocates:** Arun Kath…; Samarth Cho…; +10 more

## Timeline

- **2018-03-09 — Debenture Trust Deed…**: The Debenture Trust Deed…
- **2020-12-31 — Principal Amount Due…**: Payment of principal amount under the DTD…

## 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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