# In the matter of Mahesh Kumar Panwar Vs. Neelam Singh & Anr. CA(AT)(Insolvency) No. 185-2017 & 117-2018

> NCLAT judgment dated 27 Aug 2019. Citation: TCN-2019-NCLAT-00336. This case involves two appeals filed by Mahesh Kumar Panwar, a shareholder, promoter, and…

- **Court:** NCLAT
- **Order date:** 27 Aug 2019
- **Citation:** TCN-2019-NCLAT-00336
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/mahesh-kumar-panwar-vs-neelam-singh-anr-ca-ed74b203

## Summary

### Background

This case involves two appeals filed by Mahesh Kumar Panwar, a shareholder, promoter, and director of Megha Software Infrastructure Pvt. Ltd. (the 'Corporate Debtor'). The first appeal, Company Appeal (AT) (Insolvency) No. 185 of 2017, challenged an order dated August 23, 2017, passed by the Adjudicating Authority (NCLT, New Delhi Bench – I). This order admitted an application filed by Neelam Singh, an allottee, who was recognized as a 'Financial Creditor'. The appellant contended that an allottee of a flat does not fall under the definition of 'Financial Creditor' as per Section 5(7) read with Section 5(8) of the Insolvency and Bankruptcy Code (IBC). However, this argument was rejected by the Appellate Tribunal, citing its previous decision in "Nikhil Mehta and Sons Vs. AMR Infrastructure Ltd." and the explanation below Section 5(8) of the IBC, which clarifies that flat allottees are indeed 'Financial Creditors'.

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## Facts

Mahesh Kumar Panwar, a shareholder, promoter, and director of Megha Software Infrastructure Pvt. Ltd. (the 'Corporate Debtor'), filed Company Appeal (AT) (Insolvency) No. 185 of 2017. This appeal challenged an order dated August 23, 2017, issued by the Adjudicating Authority (National Company Law Tribunal, New Delhi Bench – I). The impugned order had admitted an application filed by Neelam Singh, the first respondent, who was an allottee and recognized as a 'Financial Creditor'.

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## Issues and analysis

### Issue 1: Whether an allottee of a flat falls within the meaning of 'Financial Creditor' under the Insolvency…

**Ratio:** An allottee of a flat is a 'Financial Creditor' as defined under Section 5(7) read with…

**Reasoning:** The Appellate Tribunal referred to its previous decision in "Nikhil Mehta and Sons Vs.…

**Interpretation:** The court interpreted Section 5(7) and Section 5(8) of the IBC, along with the…

**Application:** Applying this interpretation to the facts, the appellant's plea that the first…

## Parties

- **Judges:** S.J. Mukhop…; A.I.S. C…; +1 more
- **Advocates:** Arun Kh…; Sushant C…; +2 more

## Timeline

- **August 23, 2017 — Adjudicating Authority…**: Adjudicating Authority (NCLT, New Delhi Bench – I) admitted the application preferred by…
- **February 28, 2018 — Liquidation…**: Order of liquidation passed for the Corporate Debtor after more than 270 days elapsed…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(7) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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