# In the matter of Eternity Structures Private Limited C.P. (IB)No. 114-BB-2020

> NCLT judgment dated 2021-03-16. Citation: TCN-2021-NCLT-02685. The case involves a petition filed by IPSA Credit Pvt. Ltd. under Section 7 of the IBC, 2016,…

- **Court:** NCLT
- **Order date:** 16 Mar 2021
- **Citation:** TCN-2021-NCLT-02685
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/eternity-structures-private-limited-cp-ibno-114-bb-2020-b8f38efe

## Summary

### Background

The case involves a petition filed by IPSA Credit Pvt. Ltd. under Section 7 of the IBC, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Eternity Structures Private Limited. IPSA Credit claims that Eternity Structures defaulted on a payment of Rs. 50,00,000 excluding interest. The claim arises from agreements for sale executed between the parties where IPSA Credit invested in Eternity Structures' real estate project 'Eternity Ecstasy'. The petitioner claims to be a real estate allottee under Section 2(d) of the Real Estate (Regulation and Development) Act, 2016, and thus a financial creditor under Section 5(8)(f) of the IBC, 2016.

## Facts

IPSA Credit Pvt. Ltd. filed a petition under Section 7 of the IBC, 2016, to initiate CIRP against Eternity Structures Private Limited, alleging a default of Rs. 50,00,000 excluding interest. IPSA Credit and Eternity Structures entered into ten registered 'Agreements for sale' on 07.05.2016, where IPSA Credit invested in Eternity Structures' real estate project 'Eternity Ecstasy'. IPSA Credit remitted Rs. 5,00,000 under each agreement, totaling Rs. 50,00,000. The agreements stipulated that Eternity Structures would complete the apartments within six months, with a possible six-month extension, meaning the apartments should have been ready by 07.11.2016 or 07.05.2017. Eternity Structures failed to deliver the apartments or refund the principal with interest. IPSA Credit

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## Issues and analysis

### Issue 1: Whether the Petitioner, IPSA Credit Pvt. Ltd., can invoke the provisions of the IBC, 2016 to …

**Ratio:** The IBC is designed to address financial defaults and facilitate the resolution of

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**Reasoning:** The NCLT reasoned that the petitioner had not fulfilled its obligations under the

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**Interpretation:** The IBC is interpreted to be a mechanism for resolving financial distress, not

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**Application:** In this case, the petitioner's failure to meet the terms of the agreements for

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## Parties

- **Judges:** Rajeswara Rao…; Ashutosh C…
- **Appellants:** M/s. IPSA Credit…
- **Respondents:** M/s. Eternity…
- **Advocates:** C.K. Nand…; M.V.V.R…

## Timeline

- **2016-05-07 — Agreements for Sale…**: IPSA Credit and Eternity Structures executed ten registered 'Agreements for sale' where…
- **2016-05-07 — Advance Payme…**: IPSA Credit remitted Rs. 5,00,000 under…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(8) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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