# In the matter of Rajesh Goyal Vs. Babita Gupta & Ors. CA(AT)(Ins) No. 1056 of 2019 & I.A Nos. 4033 & 4303 of 2019

> NCLAT judgment dated 2020-02-05. Citation: TCN-2020-NCLAT-00453. This case involves an appeal against the admission of a Section 7 application under the…

- **Court:** NCLAT
- **Order date:** 5 Feb 2020
- **Citation:** TCN-2020-NCLAT-00453
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/rajesh-goyal-vs-babita-gupta-ors-ca-6599fe93

## Summary

### Background

This case involves an appeal against the admission of a Section 7 application under the Insolvency and Bankruptcy Code, 2016 ('I&B Code') for initiating a corporate insolvency resolution process against Rajesh Projects (India) Private Limited (Corporate Debtor). The application was filed by Ms. Babita Gupta, Mr. Manoj Kumar Gupta, and Ms. Sweta Gupta (Allottees - Financial Creditors). The Adjudicating Authority (National Company Law Tribunal), Principal Bench, New Delhi, admitted the application via an order dated 19th September 2019. The appellant, Mr. Rajesh Goyal (Promoter), argued that the respondents (allottees) were themselves defaulters and that there was no 'default' by the 'Corporate Debtor' in terms of the agreement, rendering the application premature.

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## Facts

Ms. Babita Gupta, Mr. Manoj Kumar Gupta, and Ms. Sweta Gupta (Allottees - Financial Creditors) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate a corporate insolvency resolution process against Rajesh Projects (India) Private Limited (Corporate Debtor), an infrastructure company. The Adjudicating Authority (National Company Law Tribunal) admitted the application on 19th September 2019. Mr. Rajesh Goyal (Promoter) appealed, arguing that the allottees were defaulters and that the corporate debtor had not defaulted. The appellant claimed that the project was nearing completion, with 75% of construction finished, including 1,920 flats in 9 towers. The corporate debtor had sold/booked around 1,650 units and received approximately

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## Issues and analysis

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

**Ratio:** The Hon'ble Supreme Court in ‘Pioneer Urban Land and Infrastructure Limited & Anr. v.

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**Reasoning:** The Appellate Tribunal considered the submissions of the Appellant regarding the

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**Interpretation:** The interpretation of Section 7 of the I&B Code and the definition of

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**Application:** Despite the project's progress, the allottees, as financial creditors, had the

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## Parties

- **Judges:** S.J. Mukhop…; Venugop…
- **Appellants:** Rajesh…
- **Respondents:** Rajesh Projects…; Babita…
- **Advocates:** Sunil K…; Chandra Shekhar…; +10 more

## Timeline

- **2019-09-19 — Admission of Ap…**: The Adjudicating Authority (National Company Law Tribunal), Principal Bench, New Delhi,…
- **2020-02-05 — Application under…**: Ms. Babita Gupta, Mr. Manoj Kumar Gupta and Ms. Sweta Gupta (Allottees - Financial…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(8) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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