# In the matter of Centrio Lifespaces Limited CP (IB) 2161-MB-C-IV-2019

> NCLT judgment dated 2020-05-06. Citation: TCN-2020-NCLT-01375. Rushabh Civil Contractors Private Limited, the Financial Creditor, filed a Company Petition…

- **Court:** NCLT
- **Order date:** 6 May 2020
- **Citation:** TCN-2020-NCLT-01375
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/centrio-lifespaces-limited-cp-ib-2161-mb-c-iv-2019-2e333dc6

## Summary

### Background

Rushabh Civil Contractors Private Limited, the Financial Creditor, filed a Company Petition under Section 7 of the Insolvency & Bankruptcy Code, 2016 (IBC) to initiate Corporate Insolvency Resolution Process (CIRP) against Centrio Lifespaces Limited, the Corporate Debtor, for failing to repay a loan of Rs. 12,39,06,879.00. The Financial Creditor claimed that a financial contract was executed on 02.12.2015, and amounts were disbursed between 07.11.2015 and 11.01.2018. The Corporate Debtor acknowledged the debt in confirmation of accounts. The Corporate Debtor, however, raised several defenses, including that the petition was filed without proper authority, that the financial contract was an internal letter of the Satra Group, and that there were illegal financial

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## Facts

Rushabh Civil Contractors Private Limited (Financial Creditor) and Centrio Lifespaces Limited (Corporate Debtor) entered into a financial contract on 02.12.2015, where the Financial Creditor agreed to provide a loan of up to ₹12,00,00,000/- to the Corporate Debtor at 12% interest per annum. Disbursements were made between 07.11.2015 and 11.01.2018. The Corporate Debtor acknowledged the financial debt in confirmation of accounts executed on 01.04.2016, 01.04.2017, and 01.02.2018. The Financial Creditor issued a demand notice on 13.05.2019, seeking payment of ₹12,39,06,879/-. The Corporate Debtor raised defenses, claiming the petition was filed without authority, the financial contract was an internal letter of the Satra Group, and there were illegal financial

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## Issues and analysis

### Issue 1: Whether the Financial Creditor has the proper authorization to initiate CIRP against the Corporate …

**Ratio:** A specific board resolution is required for initiating CIRP against a corporate debtor,

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**Reasoning:** The NCLT examined the board resolution and found that it authorized the Director to

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**Interpretation:** The interpretation of the board resolution requires a specific authorization

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**Application:** The board resolution in this case did not specifically authorize the initiation

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## Parties

- **Judges:** Rajasekha…; RavikumarDu…
- **Appellants:** Rushabh Civil…
- **Respondents:** Centrio Lifespaces…

## Timeline

- **2015-11-07 — Loan Disburseme…**: Disbursement of loan amounts from the Financial Creditor to the Corporate Debtor…
- **2015-12-02 — Financial Contract…**: The Financial Contract between the Financial Creditor and the Corporate Debtor was…

## 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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