# In the matter of Adaab Hotels Ltd. IB-2152-ND-2019

> NCLT judgment dated 2019-11-06. Citation: TCN-2019-NCLT-00694. The case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 6 Nov 2019
- **Citation:** TCN-2019-NCLT-00694
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/adaab-hotels-ltd-ib-2152-nd-2019-33469f2e

## Summary

### Background

The case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, for initiating the Corporate Insolvency Resolution Process (CIRP), declaring a moratorium, and appointing an Interim Resolution Professional (IRP). The Financial Creditor, Mr. Hukum Singh, claims that an amount of Rs. 1,18,24,984/- is payable by the Corporate Debtor, M/s. Adaab Hotels Ltd. The Financial Creditor has submitted balance sheets and account statements to support the claim.

## Facts

Mr. Hukum Singh, the Financial Creditor, filed an application under Section 7 of the IBC, claiming that M/s. Adaab Hotels Ltd., the Corporate Debtor, owes him Rs. 1,18,24,984/-. The Financial Creditor submitted balance sheets for the years ending 31.03.2016, 31.03.2017, and 31.03.2018, showing outstanding amounts plus interest. The Corporate Debtor contested the claim, alleging that the Financial Creditor, a former director, is trying to benefit from his own wrongs and has filed the petition with ulterior motives. The Corporate Debtor claimed that it does not owe any money to the Financial Creditor and that the ledger of the Corporate Debtor demonstrates that the Financial Creditor is liable to pay to the Corporate Debtor. The Corporate Debtor also argued that the

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## Issues and analysis

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

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

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**Reasoning:** The NCLT considered the documentary evidence submitted by the Financial Creditor,

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**Interpretation:** Section 7 provides the mechanism for a financial creditor to trigger the

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**Application:** The NCLT found that the Financial Creditor had fulfilled the requirements of

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## Parties

- **Judges:** SHRI. CH. MOHD.…; V.K. SUB…
- **Appellants:** Hukum S…
- **Respondents:** M/s. Adaab Hotels…
- **Advocates:** Rana Mukh…; Indranil…; +5 more

## Timeline

- **2019-11-06 — Order Del…**: Order delivered on 6th…
- **2019-06-15 — Premises Hand…**: Premises were finally handed over to M/s. Prem and Company after removing the belongings…

## 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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