# In the matter of Dreamz Infra India Limited C.P. (IB) No.84-BB-2019

> NCLT judgment dated 2019-08-20. Citation: TCN-2019-NCLT-01908. Pratap Chandra Padhy and others, acting as financial creditors, filed a petition under Section…

- **Court:** NCLT
- **Order date:** 20 Aug 2019
- **Citation:** TCN-2019-NCLT-01908
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/dreamz-infra-india-limited-cp-ib-no84-bb-2019-008842df

## Summary

### Background

Pratap Chandra Padhy and others, acting as financial creditors, filed a petition under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s. Dreamz Infra India Limited, the corporate debtor. The financial creditors claimed that the corporate debtor defaulted on a payment of Rs. 40,06,625. The corporate debtor floated a housing project named 'Dreamz Sumadhur' in 2014, promising possession by 2018. Buyers, including the financial creditors, made deposits as per the scheme. However, construction stalled after November 2015, and responsible officers of the corporate debtor became unreachable. The project was left unattended, leading to complaints and criminal proceedings. The

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## Facts

Pratap Chandra Padhy and two others, acting as financial creditors/homebuyers, filed a petition against M/s. Dreamz Infra India Limited, the corporate debtor, under Section 7 of the IBC, 2016. The financial creditors claimed a default of Rs. 40,06,625. The corporate debtor launched a housing project called 'Dreamz Sumadhur' in 2014, promising possession by 2018. Buyers, including the financial creditors, made payments as per the scheme. After November 2015, construction stalled, and the corporate debtor's officers became unreachable. The project was left unattended, leading to complaints and criminal proceedings. The financial creditors served a legal notice in September 2018, demanding a refund, but the corporate debtor failed to comply, claiming the project would be

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## Issues and analysis

### Issue 1: Whether the petition filed by the financial creditors under Section 7 of the IBC, 2016 is …

**Ratio:** Section 7 of the IBC, 2016 allows a financial creditor to initiate CIRP against a

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**Reasoning:** The Adjudicating Authority considered the provisions of Section 7 of the IBC, 2016, and

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**Interpretation:** Section 7 of the IBC, 2016, provides the framework for a financial creditor to

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**Application:** In this case, the Adjudicating Authority found that a debt and default existed

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## Parties

- **Judges:** Rajeswara Rao…; Ashok Kumar…
- **Appellants:** Pratap Chandra…
- **Respondents:** M/s.Dreamz Infra…

## Timeline

- **2014-01-01 — Project L…**: Corporate Debtor launched 'Dreamz Sumadhur'…
- **2015-11-01 — Construction…**: Construction of the project…

## 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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