# In the matter of Vinayaka Exports & Anr. Vs. Colorhome Developers Pvt. Ltd. CA(AT) (Insolvency) No. 06 of 2019

> NCLAT judgment dated 2019-09-23. Citation: TCN-2019-NCLAT-00255. The case involves an appeal against an order passed by the Adjudicating Authority (NCLT,…

- **Court:** NCLAT
- **Order date:** 23 Sept 2019
- **Citation:** TCN-2019-NCLAT-00255
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/vinayaka-exports-anr-vs-colorhome-developers-pvt-ltd-ca-5c83108a

## Summary

### Background

The case involves an appeal against an order passed by the Adjudicating Authority (NCLT, Division Bench, Chennai) which rejected an application filed under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016. The Appellants, Vinayaka Exports and Mrs. Divya M. Jain, claimed that the Adjudicating Authority should not have rejected their application. The Adjudicating Authority dismissed the application based on the existence of disputes between the Appellants and the Respondent, Colorhome Developers Pvt. Ltd., pending proceedings in various forums, and the lack of segregation in the statements of accounts between Colorhomes (sole proprietorship) and Colorhome Developers Pvt Ltd. The Adjudicating Authority also cited the pendency of a civil suit and a dispute in

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## Facts

Vinayaka Exports and Mrs. Divya M. Jain (Appellants) filed an application under Section 7 of the Insolvency and Bankruptcy Code (IBC) against Colorhome Developers Pvt. Ltd. (Respondent/Corporate Debtor) for initiation of Corporate Insolvency Resolution Process (CIRP). The Appellants claimed that the Corporate Debtor defaulted on a financial debt. The First Applicant had granted debt of Rs. 8.20 Crores on 10.08.2012 and 01.12.2012 and Rs. 2 Crores disbursed by the Second Applicant on 28.09.2012. The total amount claimed to be default was Rs. 10,14,53,750/-. The Corporate Debtor had given a Promissory Note dated 01.12.2012 for a sum of Rs. 8.20 crores in favour of the First Appellant and Promissory Note dated 28.09.2012 for a sum of Rs. 2 Crores in favour of the Second

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority was justified in rejecting the application under Section 7 of …

**Ratio:** The ratio decidendi is that the existence of a dispute regarding the debt amount, the

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**Reasoning:** The Tribunal reasoned that the Adjudicating Authority should not have rejected the

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**Interpretation:** The interpretation of Section 7 of the IBC, particularly in light of the

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**Application:** In this case, the Tribunal applied the ratio and reasoning to the specific

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## Parties

- **Judges:** S.J. Mukhop…; A.I.S. C…; +1 more
- **Appellants:** Vinayaka E…
- **Respondents:** COLORHOME…

## Timeline

- **2018-10-25 — Order by Adjudicating Authority (NCLT, Division…**: The Adjudicating Authority passed an order rejecting the application filed under Section…
- **2019-09-23 — Order by…**: The NCLAT set aside the order of the Adjudicating Authority and directed it to admit the…

## 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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