# In the matter of Colorhome Developers Pvt. Ltd. CP-358-(IB)-2018

> NCLT judgment dated 2018-10-25. Citation: TCN-2018-NCLT-00499. The case involves a petition filed by M/s. Vinayaka Exports and Mrs. Divya M. Jain (Financial…

- **Court:** NCLT
- **Order date:** 25 Oct 2018
- **Citation:** TCN-2018-NCLT-00499
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/colorhome-developers-pvt-ltd-cp-358-ib-2018-986f34e9

## Summary

### Background

The case involves a petition filed by M/s. Vinayaka Exports and Mrs. Divya M. Jain (Financial Creditors) against M/s. Colorhome Developers Private Limited (Corporate Debtor) under Section 7 of the Insolvency and Bankruptcy Code, 2016. The financial creditors claimed default on a loan amount. The corporate debtor contested the claim, stating that the amounts were borrowed by a sole proprietorship concern, M/s. Colorhomes, and not directly by the corporate entity. The respondent also alleged that the petitioners were demanding exorbitant interest and had filed false criminal complaints. The petitioners argued that the respondent had admitted to borrowing the money in various documents and legal notices.

## Facts

M/s. Vinayaka Exports and Mrs. Divya M. Jain, claiming to be financial creditors, filed a petition against M/s. Colorhome Developers Private Limited, the corporate debtor, under Section 7 of the IBC, 2016. The financial creditors alleged that the corporate debtor defaulted on a loan amount of ₹10,14,53,750 as on 31.12.2017, with the date of default being December 2016. The corporate debtor argued that the funds were borrowed by a sole proprietorship, M/s. Colorhomes, before the company's incorporation, and not by the corporate entity itself. The corporate debtor also claimed that the petitioners were demanding exorbitant interest and had filed false criminal complaints. The amount grated to the respondent is ₹10.20 crores (*8.20 crores disbursed by the 1st Applicant on

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## Issues and analysis

### Issue 1: Whether the petition filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 is …

**Ratio:** The Insolvency and Bankruptcy Code, 2016 allows for the initiation of corporate

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**Reasoning:** The Tribunal observed that there were disputes between the petitioners and the

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**Interpretation:** Section 7 of the IBC requires a clear and undisputed debt for the initiation of

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**Application:** In this case, the existence of disputes and a pending civil suit, along with

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## Parties

- **Judges:** B.S.V. Prakash…; S. VIJAYARA…
- **Appellants:** M/s.Vinayaka…
- **Respondents:** M/s.Colorhome…
- **Advocates:** Abitha…; P.A.Dellh…

## Timeline

- **2010-05-28 — Incorporation of…**: M/s.Colorhome Developers Private Limited…
- **2012-08-10 — Disbursement by 1st…**: ₹8.20 crores disbursed…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(6) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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