# In the matter of Celestial Estate Pvt. Ltd. (IB)-1768(ND)-2018

> NCLT judgment dated 2019-03-11. Citation: TCN-2019-NCLT-04501. The case involves a petition filed by three financial creditors under Section 7 of the…

- **Court:** NCLT
- **Order date:** 11 Mar 2019
- **Citation:** TCN-2019-NCLT-04501
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/celestial-estate-pvt-ltd-ib-1768nd-2018-a6e465ce

## Summary

### Background

The case involves a petition filed by three financial creditors under Section 7 of the Insolvency & Bankruptcy Code, 2016, seeking the initiation of the Corporate Insolvency Resolution Process (CIRP) against Celestial Estate Pvt. Ltd. The creditors had booked studio apartments/commercial space in a project called "Earth Iconic" developed by the corporate debtor in Sector 71, Gurugram, Haryana. The license for the project was sanctioned in 2011, and construction began in 2012. The corporate debtor assured completion by 2017 and possession by March 2018. However, the license to develop the project was revoked on 2017-01-04, due to the standstill of the project's construction.

## Facts

Sanjay Malik and others, acting as financial creditors, filed a petition against Celestial Estate Pvt. Ltd., the corporate debtor, under Section 7 of the Insolvency & Bankruptcy Code, 2016. The financial creditors had booked studio apartments/commercial space in the corporate debtor's project, "Earth Iconic," located in Sector 71, Gurugram, Haryana. The Town and Country Planning Department, Government of Haryana, sanctioned the license to develop the project in 2011, and construction commenced in 2012. The corporate debtor assured completion by 2017 and possession by March 2018. Petitioners 1 & 2 made a total down payment of Rs. 6,46,84,349/- in 2016 toward 13 Studio Apartments, the Financial Creditor No. 3 booked an office space and was allotted unit

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## Issues and analysis

### Issue 1: Whether the financial creditors are entitled to initiate the Corporate Insolvency Resolution …

**Ratio:** The legal principle applied is that if a corporate debtor fails to fulfill its

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**Reasoning:** The court reasoned that the financial creditors had made payments towards the allotment

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**Interpretation:** The interpretation of the law is that the Insolvency & Bankruptcy Code,

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**Application:** In this specific case, the financial creditors had paid for units in a project

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## Parties

- **Judges:** Ina Mal…; V.K. SUB…
- **Appellants:** Sanjay…
- **Respondents:** Celestial Estate…

## Timeline

- **2011-01-01 — License San…**: License to develop the "Earth Iconic" project sanctioned by the Town and Country Planning…
- **2012-01-01 — Construction I…**: Construction of the "Earth…

## 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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