# In the matter of BOP Projects Pvt. Ltd. (IB)-526-(ND)-2017

> NCLT judgment dated 2018-04-13. Citation: TCN-2018-NCLT-01553. The case involves a petition filed under Section 7 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 13 Apr 2018
- **Citation:** TCN-2018-NCLT-01553
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/bop-projects-pvt-ltd-ib-526-nd-2017-0ebc4268

## Summary

### Background

The case involves a petition filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, by three financial creditors against BOP Projects Pvt. Ltd., the corporate debtor. The financial creditors claim that the corporate debtor failed to repay a financial debt owed to them, leading to the initiation of the Corporate Insolvency Resolution Process (CIRP). The financial creditors had financed loans to the corporate debtor, secured by post-dated cheques and an option to retain studio apartments as collateral security. The cheques issued by the corporate debtor were dishonored, and proceedings under Section 138 of the Negotiable Instruments Act failed to yield results.

## Facts

Govind Ram, Ramesh Chand, and Hemant Miglani, acting as financial creditors, filed a petition against BOP Projects Pvt. Ltd., the corporate debtor, under Section 7 of the Insolvency and Bankruptcy Code, 2016. Financial Creditor No. 1, Govind Ram, had financed a loan of Rs. 12,75,173 to the Corporate Debtor, which was to be repaid with 15% interest per annum after one year. A post-dated cheque for Rs. 16,56,421, dated December 20, 2015, was issued. As collateral security, the Corporate Debtor offered a studio apartment. Financial Creditors No. 2 and 3 had similar transactions. All three financial creditors did not exercise their right to opt for the studio apartments and preferred to encash their cheques. However, the cheques were dishonored with the memo 'Account

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## Issues and analysis

### Issue 1: Whether the applicants can be considered as Financial Creditors under the Insolvency and Bankruptcy …

**Ratio:** The ratio is based on the definition of 'financial debt' under Section 5(8) of the

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**Reasoning:** The court reasoned that the mutual agreement between the parties acknowledged the receipt

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**Interpretation:** The interpretation of the term 'financial debt' is crucial in determining

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**Application:** The court applied the definition of 'financial debt' to the facts of the case,

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## Parties

- **Judges:** Ina Mal…; Deepa Kr…; +1 more
- **Appellants:** Govind…
- **Respondents:** BOP Projects Pvt.…

## Timeline

- **2014-12-24 — Advance P…**: Govind Ram paid an advance of Rs. 12,75,173 against a studio apartment, acknowledged via…
- **2015-01-02 — Mutual Agr…**: Mutual Agreement executed between BOP…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(8) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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