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

> NCLT judgment dated 2021-08-02. Citation: TCN-2021-NCLT-01525. 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-01525
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/aagam-infrabuild-pvt-ltd-cpib-339-of-2020-c36a6262

## Summary

### Background

Magma Housing Finance Limited filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against Aagam Infrabuild Private Limited, claiming a default of Rs. 43,20,000/- including interest. The Corporate Debtor contended that the loan was actually borrowed by individuals Minesh B. Busha and Pravina M. Busha as a housing loan, and they are liable to repay it. A tripartite agreement existed between the applicant, the corporate debtor, and the two individuals. The corporate debtor issued a letter of allotment for a flat sale, but possession was not given due to non-payment of the balance consideration. The Financial Creditor sent a cancellation letter for the allotment.

## Facts

Magma Housing Finance Limited (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate CIRP against Aagam Infrabuild Private Limited (Corporate Debtor). The claimed default amount was Rs. 43,20,000/-, including interest of Rs. 6,44,804. The disbursement date was 2018-11-29, and the default date was 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. A tripartite agreement dated 2018-11-30 existed between the Applicant, the Corporate Debtor, and the two individuals. 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

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## Issues and analysis

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

**Ratio:** The application under Section 7 of the IBC is maintainable only if there is a debt and

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**Reasoning:** The court considered the submissions and material on record, including the tripartite

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**Interpretation:** Section 7 of the IBC requires the existence of a debt and default by the

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**Application:** In this case, the court found that the liability to repay the loan rested with

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## Parties

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

## Timeline

- **2018-01-01 — Borrowers Rem…**: Borrowers remitted Rs.…
- **2018-10-22 — Letter of Al…**: Corporate Debtor issued a letter of…

## 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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