# In the matter of Home Kraft Avenues vs. Jayesh Sanghrajka & Ors.

> NCLAT judgment dated 2025-02-14. Citation: TCN-2025-NCLAT-00214. The appeal was filed against an order dated 02.05.2023, where the appellant was categorized…

- **Court:** NCLAT
- **Order date:** 14 Feb 2025
- **Citation:** TCN-2025-NCLAT-00214
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/home-kraft-avenues-vs-jayesh-sanghrajka-ors-5bb33488

## Summary

### Background

The appeal was filed against an order dated 02.05.2023, where the appellant was categorized as an unsecured creditor instead of a secured creditor. The appellant argued that a loan agreement dated 29.10.2015, granted a loan of Rs. 11 crores to the Corporate Debtor, secured by four flats, should qualify them as a secured creditor. The Corporate Debtor failed to repay the principal amount, and the cheques were dishonored. The RP admitted the appellant's claim as a home buyer for four flats allotted in lieu of interest but classified the appellant as an unsecured creditor for the principal amount.

## Facts

Home Kraft Avenues (Appellant) granted a loan of Rs. 11 crores to Ornate Spaces R/t Ltd (Corporate Debtor) on 29.10.2015. The loan was initially payable after three years, with extensions granted later. The agreement provided two options for interest payment: 18% interest or transfer of four flats (No. 1501, 1502, 1504, 1601) to the Appellant. A clause stipulated that if the Corporate Debtor failed to pay the principal, four additional apartments (No. 1901, 1902, 1904, 2001) would be transferred. The Corporate Debtor defaulted on the principal amount, and the cheques were dishonored. On 29.06.2020, CIRP was initiated against the Corporate Debtor. The Appellant filed two claims: one for Rs. 11 crores as a secured financial creditor and another as the holder of four

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## Issues and analysis

### Issue 1: Whether the appellant should be treated as a secured creditor despite the charge not being …

**Ratio:** The court held that non-registration of a charge under Section 77 of the Companies Act,

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**Reasoning:** The court reasoned that Section 77(3) of the Companies Act, 2013, primarily applies to

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**Interpretation:** The court interpreted that the IBC provisions regarding security interest are

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**Application:** The court applied the ratio to the facts by noting that the loan agreement and

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## Parties

- **Judges:** Yogesh K…; Arun Ba…
- **Appellants:** Home Kraft…
- **Respondents:** Ornate Spaces R/t…; Jayesh Sang…

## Timeline

- **2015-10-29 — Loan Agre…**: Home Kraft Avenues granted a loan of Rs.…
- **2017-11-15 — Loan Repayment…**: Initial deadline for Ornate Spaces R/t Ltd…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 3(4) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-3)

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