# In the matter of DCOM Systems Limited C.P. No. (IB) 408-7-NCLT-AHM-2019

> NCLT judgment dated 2020-06-29. Citation: TCN-2020-NCLT-01103. The case involves an application filed by Neev Construction, a financial creditor, against DCOM…

- **Court:** NCLT
- **Order date:** 29 Jun 2020
- **Citation:** TCN-2020-NCLT-01103
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/dcom-systems-limited-cp-no-ib-408-7-nclt-ahm-2019-98f32c9d

## Summary

### Background

The case involves an application filed by Neev Construction, a financial creditor, against DCOM Systems Limited, the corporate debtor, under Section 7 of the Insolvency and Bankruptcy Code, 2016. The application was filed on June 18, 2019, seeking reliefs under Section 7(5)(a) and Section 13(1)(a)(b)(c) of the Code. The financial creditor claimed a default amount of Rs. 3,08,63,159/-, including a principal amount of Rs. 1,86,50,000 and interest. The Adjudicating Authority (NCLT) observed that Neev Construction is a proprietorship concern and the application was filed in its name, not in the name of its proprietor, Vishal G Kevadiya.

## Facts

Neev Construction, claiming to be a financial creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against DCOM Systems Limited, the corporate debtor. The application was filed on June 18, 2019, seeking reliefs under Section 7(5)(a) and Section 13(1)(a)(b)(c) of the Code. Neev Construction claimed that it had provided financial assistance of Rs. 2,00,00,000 to DCOM Systems Pvt. Ltd. for execution of NWS water line Projects at Nazafgard & Nagloi, New Delhi, at an interest rate of 18% per annum for a period of 2 years. The financial creditor claimed a default amount of Rs. 3,08,63,159/-, including a principal amount of Rs. 1,86,50,000 and interest of Rs. 1,22,13,159/-. The date of default was stated as June 1, 2019. The

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## Issues and analysis

### Issue 1: Whether a proprietorship firm claiming to be a financial creditor can file a proceeding/suit under …

**Ratio:** A proprietorship firm is not a legal entity and cannot institute a suit in its own name

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**Reasoning:** The Adjudicating Authority reasoned that the definition of 'person' under Section 3(23)

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**Interpretation:** The legal issue revolves around the interpretation of the term 'person' as

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**Application:** In this specific case, the application was filed in the name of M/s. Neev

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## Parties

- **Judges:** Manorama…; Chockalingam…
- **Appellants:** Neev Constr…
- **Respondents:** DCOM Systems…

## Timeline

- **2019-06-18 — Petition…**: Neev Construction filed a petition under Section 7 of the Insolvency and Bankruptcy Code…
- **2019-06-25 — Notification of…**: The petition 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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