# In the matter of Aagam Infrabuild Pvt. Ltd/ CP(IB) 339 of 2020

> NCLT judgment dated 2021-08-02. Citation: TCN-2021-NCLT-01519. Magma Housing Finance Limited filed an application under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 2 Aug 2021
- **Citation:** TCN-2021-NCLT-01519
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/aagam-infrabuild-pvt-ltd-cpib-339-of-2020-44c16509

## Summary

### Background

Magma Housing Finance Limited filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Aagam Infrabuild Private Limited, claiming a default of Rs. 43,20,000/- including interest. The application was heard ex-parte against the Corporate Debtor. The Corporate Debtor contended that the loan was actually borrowed by Mr. Minesh B. Busha and Ms. Pravina M. Busha as a housing loan from the Financial Creditor, and they are liable to repay the same. The Corporate Debtor also claimed that it is a going concern and a viable company.

## Facts

Magma Housing Finance Limited filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate CIRP against Aagam Infrabuild Private Limited, claiming a default of Rs. 43,20,000/- including interest of Rs. 6,44,804. The date of disbursement was stated as 2018-11-29, and the date of default was stated as 2020-01-27. The Corporate Debtor contended that the loan was actually borrowed by Mr. Minesh B. Busha and Ms. Pravina M. Busha as a housing loan from the Financial Creditor. The Financial Creditor sanctioned a loan of Rs. 48,00,000/- but disbursed only Rs. 43,20,000/-. The Corporate Debtor issued a letter of allotment dated 2018-10-22 wherein consideration for the sale of flat is shown at Rs. 63 lakhs. Borrowers had remitted Rs. 13,25,000/-

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## Issues and analysis

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

**Ratio:** The application under Section 7 of the IBC is not maintainable if there is no debt or

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**Reasoning:** The court reasoned that there is no liability on the part of the Corporate Debtor to

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**Interpretation:** Section 7 of the IBC allows a financial creditor to initiate CIRP against a

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**Application:** In this case, the court found that the loan was actually borrowed by individual

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## Parties

- **Judges:** Madan B.…; Virendra Kumar…
- **Appellants:** Magma Housing…
- **Respondents:** Aagam Infrabuild…; Aagam Infrabuild…

## Timeline

- **2018-01-01 — Borrowers Rem…**: Borrowers remitted Rs.…
- **2018-10-22 — Letter of Al…**: Corporate Debtor issued a letter of allotment with consideration for the sale of flat…

## 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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