# In the matter of BCIL Zed Ria Properties Pvt. Ltd. CP (IB) No. 03-BB-2018

> NCLT judgment dated 2018-08-09. Citation: TCN-2018-NCLT-00963. The case involves three company petitions (CP(IB) No. 03/BB/2018, CP(IB) No. 06/BB/2018, and…

- **Court:** NCLT
- **Order date:** 9 Aug 2018
- **Citation:** TCN-2018-NCLT-00963
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/bcil-zed-ria-properties-pvt-ltd-cp-ib-no-03-bb-2018-65df7373

## Summary

### Background

The case involves three company petitions (CP(IB) No. 03/BB/2018, CP(IB) No. 06/BB/2018, and CP(IB) No. 14/BB/2018) filed under Section 7 of the Insolvency & Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP). The petitioners, Reliance Nippon Life Asset Management Limited and Reliance India Realty Opportunities LLP, claim that the respondents, BCIL Zed Ria Properties Private Limited, BCIL Red Earth Developers India Private Limited, and Biodiversity Conservation India Private Limited, defaulted on debenture outstandings. The petitions were consolidated due to overlapping issues.

## Facts

Reliance Nippon Life Asset Management Limited and Reliance India Realty Opportunities LLP (Financial Creditors) lent money to BCIL Zed Ria Properties Private Limited, BCIL Red Earth Developers India Private Limited, and Biodiversity Conservation India Private Limited (Corporate Debtors) through debenture subscription agreements. The Corporate Debtors defaulted on payments, leading the Financial Creditors to file petitions under Section 7 of the Insolvency & Bankruptcy Code, 2016. The debentures were secured by mortgages, pledges, and guarantees. The Corporate Debtors argued that they were unable to pay due to unforeseen floods and that the interest rates were excessive. The Financial Creditors claimed that the Corporate Debtors had issued balance confirmation

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## Issues and analysis

### Issue 1: Whether the Petitioners qualify as Financial Creditors under Section 5(7) and 5(8) of the …

**Ratio:** Section 5(7) defines a 'financial creditor' as a person to whom a financial debt is owed

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**Reasoning:** The Tribunal considered the debenture subscription agreements, which constituted a

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**Interpretation:** The Tribunal interpreted Section 5(7) and 5(8) of the IBC to include entities

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**Application:** The Tribunal applied the definition of 'financial creditor' and 'financial

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## Parties

- **Judges:** Rajeswara Rao…; Ashok Kumar…
- **Appellants:** M/s Reliance…
- **Respondents:** M/s. BCIL Zed Ria…
- **Advocates:** N K D…; M.G. Nan…; +2 more

## Timeline

- **2014-01-17 — Debenture Subscription…**: The Petitioner/Financial Creditor pursuant to the execution of Debenture Subscription…
- **2014-04-28 — Debenture Subscription…**: The Petitioners/Financial Creditors and Reliance Capital Limited, pursuant to the…

## 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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