# In the matter of AMR Infrastructures Ltd. CP No. (IB)-10 (PB) 2017

> NCLT judgment dated 2017-02-20. Citation: TCN-2017-NCLT-00970. The case involves an application filed by four applicants seeking to initiate the insolvency…

- **Court:** NCLT
- **Order date:** 20 Feb 2017
- **Citation:** TCN-2017-NCLT-00970
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/amr-infrastructures-ltd-cp-no-ib-10-pb-2017-5a25da23

## Summary

### Background

The case involves an application filed by four applicants seeking to initiate the insolvency process against M/s AMR Infrastructures Ltd. The applicants claimed to be financial creditors based on agreements for assured returns on properties booked in projects developed by the respondent. The applicants alleged default in payment of these assured returns and sought to trigger the corporate insolvency resolution process under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016.

## Facts

Four applicants, including Nikhil Mehta & Sons (HUF) and others, filed an application to initiate the insolvency process against M/s AMR Infrastructures Ltd. The applicants claimed to be 'Financial Creditors' under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016. The applicants had booked properties in projects developed by AMR Infrastructure and were promised 'assured returns' on their investments. Applicant No.1 is a HUF with Shri Nikhil Mehta as its Karta. Applicant No.2 is the wife of Shri Nikhil Mehta, who is also Applicant No.3. Applicant No.4 is Mrs. Praveen Mehta, mother of Applicant No.3. The applicants alleged that AMR Infrastructure defaulted on the payment of these 'assured returns'. Specifically, Applicants No.3 and 4 booked office spaces

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## Issues and analysis

### Issue 1: Whether the applicants qualify as 'Financial Creditors' under Section 5(7) of the Insolvency and …

**Ratio:** A 'Financial Creditor' is defined as a person to whom a financial debt is owed and

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**Reasoning:** The court reasoned that the applicants' claim was based on 'assured returns' promised in

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**Interpretation:** The court interpreted Section 5(7) of the IBC to require a direct relationship

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**Application:** In this case, the 'assured returns' were not considered a 'financial debt'

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## Parties

- **Judges:** M. M. K…; R. VARADH…
- **Appellants:** Nikhil Mehta &…
- **Respondents:** AMR Infrastructure…; M/s AMR Infrastruc…

## Timeline

- **2007-07-12 — Execution of MOU for…**: Applicants No.3 and 4 executed a Memorandum of Understanding (MOU) for office spaces in…
- **2012-10-17 — Execution of Fresh MOU…**: Applicants substituted their booking in the 'I-Mall' project and executed a fresh MOU for…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(7) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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