# In the matter of AMR Infrastructures Ltd. C.P. No. (ISB)-03(PB)-2017

> NCLT judgment dated 2017-01-23. Citation: TCN-2017-NCLT-00986. The case involves an application filed by four applicants seeking to initiate the insolvency…

- **Court:** NCLT
- **Order date:** 23 Jan 2017
- **Citation:** TCN-2017-NCLT-00986
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/amr-infrastructures-ltd-cp-no-isb-03pb-2017-08b25e20

## 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 under Section 7 of the Insolvency and Bankruptcy Code (IBC), based on assured returns promised on investments in commercial and residential properties. The applicants alleged default in payment of these assured returns and sought to trigger the corporate insolvency resolution process. The respondent, AMR Infrastructure, is a registered company involved in real estate development.

## Facts

Four applicants filed an application to initiate insolvency proceedings against M/s AMR Infrastructures Ltd, claiming to be financial creditors based on promised 'assured returns' on property 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 application was filed through Power of Attorney holder Shri Suresh Mehta. The applicants booked office spaces and a residential flat in projects developed by AMR Infrastructure. Memoranda of Understanding (MOUs) were executed, promising 'assured returns' until possession. The respondent allegedly defaulted on these payments, and cheques issued were dishonored. The

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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 to be considered a 'Financial Creditor', the requirements of

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**Interpretation:** The court interpreted the definition of 'Financial Creditor' narrowly,

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**Application:** The court found that the 'assured returns' promised on the property investments

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## Parties

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

## Timeline

- **2007-07-12 — Execution of Memorandum…**: Applicants No.3 and 4 executed Memorandum of Understanding for office spaces in the…
- **2008-04-12 — Execution of Memorandum…**: Applicants No.2 and 3 executed Memorandum of Understanding for a shop in the 'I-Mall'…

## 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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