# In the matter of Earth Gracia Buildcon Pvt. Ltd. (IB)-448(PB)-2017

> NCLT judgment dated 2019-01-17. Citation: TCN-2019-NCLT-05229. Mr. Rajendra Kumar Saxena, an allottee of a real estate project, filed an application under…

- **Court:** NCLT
- **Order date:** 17 Jan 2019
- **Citation:** TCN-2019-NCLT-05229
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/earth-gracia-buildcon-pvt-ltd-ib-448pb-2017-1a963868

## Summary

### Background

Mr. Rajendra Kumar Saxena, an allottee of a real estate project, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, for initiating the Corporate Insolvency Resolution Process (CIRP) against 'M/s Earth Gracia Buildcon Private Limited'. The Adjudicating Authority initially dismissed the application, stating that the disbursement made by the Applicant did not fall within the meaning of 'financial debt'.

## Facts

Mr. Rajendra Kumar Saxena, a real estate allottee, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate CIRP against Earth Gracia Buildcon Pvt. Ltd. The initial application was dismissed by the NCLT on the grounds that the disbursement did not constitute a 'financial debt'. However, the NCLAT overturned this decision, citing the 'Terms and Conditions' of the 'Allotment Letter,' which included an Assured Return, and the fact that Mr. Saxena had already paid Rs. 13 Lakhs to Earth Gracia Buildcon. The NCLAT also referenced its previous ruling in 'Nikhil Mehta & Sons' Vs. 'AMR Infrastructure Ltd.' and the amended Section 5(8)(f) of the Code, which classifies real estate allottees as 'Financial Creditors'. The NCLAT remitted the

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016, should be …

**Ratio:** The ratio is based on the NCLAT's direction to admit the application, considering the

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**Reasoning:** The court reasoned that the Adjudicating Authority had erred in dismissing the

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**Interpretation:** The interpretation involves understanding the scope of Section 7 of the IBC and

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**Application:** The ratio and reasoning were applied to the specific facts of the case, where

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## Parties

- **Judges:** M. M. K…; DEEPTI M…
- **Appellants:** Rajendra Kumar…
- **Respondents:** Earth Gracia…; Earth Gracia…
- **Advocates:** Rakesh Kuma…; Prashant…

## Timeline

- **2018-03-05 — Initial Ju…**: The Adjudicating Authority-NCLT dismissed…
- **2018-09-11 — NCLAT Or…**: The Hon'ble NCLAT set aside the initial judgment…

## 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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This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclt-chandigarh/earth-gracia-buildcon-pvt-ltd-ib-448pb-2017-1a963868