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

> NCLT judgment dated 2019-03-11. Citation: TCN-2019-NCLT-04506. The case involves a petition filed by three financial creditors against Celestial Estate Pvt.…

- **Court:** NCLT
- **Order date:** 11 Mar 2019
- **Citation:** TCN-2019-NCLT-04506
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/celestial-estate-pvt-ltd-ib-1768nd-2018-a8cae458

## Summary

### Background

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 The license was revoked on 2017-01-04 by the Town and Country Planning Department due to the project's standstill.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

## Facts

Sanjay Malik, Mrs. Atika Malik, and Mrs. Shashi Prabha Mishra, the financial creditors, booked studio apartments/commercial space in the "Earth Iconic" project developed by Celestial Estate Pvt. Ltd. in Gurugram, Haryana. The project's development license was sanctioned in 2011, and construction commenced in 2012. The creditors made payments towards the allotment of units. Sanjay Malik and Mrs. Atika Malik made a down payment of Rs. 6,46,84,349 in 2016 for 13 studio apartments. Mrs. Shashi Prabha Mishra booked an office space and paid Rs. 12,54,330. The corporate debtor assured completion by 2017 and possession by March 2018. However, the Town and Country Planning Department revoked the license on 2017-01-04 due to the project's standstill. The corporate

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## Issues and analysis

### Issue 1: Whether the petition filed by the financial creditors under Section 7 of the Insolvency & …

**Ratio:** Section 7 of the Insolvency & Bankruptcy Code, 2016, allows a financial creditor to

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

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**Interpretation:** Section 7 provides a mechanism for financial creditors to recover their dues

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**Application:** The court applied Section 7 to the facts, finding that the corporate debtor's

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## Parties

- **Judges:** Ina Mal…; V.K. SUB…
- **Appellants:** Sanjay…
- **Respondents:** Celestial Estate…
- **Advocates:** Lakshay S…; Yogen…; +1 more

## Timeline

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

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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