# In the matter of AVJ Developers (India) Private Limited C.P. No. IB-654(PB)-2019

> NCLT judgment dated 2019-10-21. Citation: TCN-2019-NCLT-00888. M/s. Vishal Fabrics & Ors. filed a petition under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 21 Oct 2019
- **Citation:** TCN-2019-NCLT-00888
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/avj-developers-india-private-limited-cp-no-ib-654pb-2019-a2020745

## Summary

### Background

M/s. Vishal Fabrics & Ors. filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s. AVJ Developers (India) Private Limited. The petitioners, acting as financial creditors, claimed that the corporate debtor defaulted on its financial obligations. The corporate debtor was incorporated on 22.06.2010 and is engaged in the construction business. The financial creditors had provided financial assistance/loan to the corporate debtor for its project 'AVJ Heights' situated at Sector Zeta-1, Plot No. GH-12/2, Greater Noida, U.P. The corporate debtor promised higher returns on the investments made by the petitioners and also allotted flats as collateral security. The corporate

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## Facts

M/s. Vishal Fabrics & Ors. (Financial Creditors) filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against M/s. AVJ Developers (India) Private Limited (Corporate Debtor). The Corporate Debtor was incorporated on 22.06.2010 and is engaged in the construction business. The Financial Creditors provided financial assistance/loan to the Corporate Debtor for its project 'AVJ Heights' situated at Sector Zeta-1, Plot No. GH-12/2, Greater Noida, U.P. The Corporate Debtor promised higher returns on the investments and allotted flats as collateral security. Petitioner No. 1, M/s. Vishal Fabrics, invested Rs. 50,00,000/- via cheque dated 24.07.2014. Petitioner No. 2, Mr. Dinesh Khaitan, invested Rs. 2,00,00,000/- via cheque dated 01.08.2014.

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## Issues and analysis

### Issue 1: Whether the Financial Creditor has succeeded in establishing a case for triggering the Corporate …

**Ratio:** The Adjudicating Authority must ascertain and record satisfaction in an adjudication

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**Reasoning:** The Adjudicating Authority considered the submissions of both parties and found that the

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

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**Application:** The Adjudicating Authority applied the ratio to the facts of the case and

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## Parties

- **Judges:** M. M. K…; DEEPTI M…
- **Appellants:** M/s. Vishal…
- **Respondents:** M/s. AVJ Developer…

## Timeline

- **2010-06-22 — Incorporation of…**: M/s. AVJ Developers (India)…
- **2014-02-24 — Investment by M/s.…**: M/s. Capital Trade Links Ltd.…

## 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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