# In the matter of Fortuna Buildcon India Pvt. Ltd. C.P. (IB) No. 124-BB-2017

> NCLT judgment dated 2019-08-09. Citation: TCN-2019-NCLT-02005. The case pertains to a petition filed by M/s. Reliance Capital AIF Trustee Company Private…

- **Court:** NCLT
- **Order date:** 9 Aug 2019
- **Citation:** TCN-2019-NCLT-02005
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/fortuna-buildcon-india-pvt-ltd-cp-ib-no-124-bb-2017-57fcb8a3

## Summary

### Background

The case pertains to a petition filed by M/s. Reliance Capital AIF Trustee Company Private Limited and M/s. Reliance Nippon Life Asset Management Limited (Financial Creditors) under Section 7 of the Insolvency and Bankruptcy Code, 2016, read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s. Fortuna Buildcon India Private Limited (Corporate Debtor). The petition was filed due to the Corporate Debtor's default on a total outstanding amount of Rs. 59,42,52,495 as of 2017-03-31, along with 21.50% IRR. The Corporate Debtor had issued Non-Convertible Debentures (NCDs) to the Financial Creditors, and the default was a violation of the Debenture Subscription

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## Facts

M/s. Reliance Capital AIF Trustee Company Private Limited and M/s. Reliance Nippon Life Asset Management Limited (Financial Creditors) filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s. Fortuna Buildcon India Private Limited (Corporate Debtor) due to a default on debt obligations. The Corporate Debtor had issued Non-Convertible Debentures (NCDs) to the Financial Creditors. The outstanding amount was Rs. 59,42,52,495 as of 2017-03-31, along with 21.50% IRR. The Corporate Debtor admitted to the debt but claimed the default was due to circumstances beyond its control, including the demise of Shri Naresh Kumar, which caused obstacles in the project. The Corporate Debtor also

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## Issues and analysis

### Issue 1: Whether the debt and default in question are proved/established with adequate evidence as required …

**Ratio:** Section 7 of the IBC requires the Adjudicating Authority to ascertain the existence of a

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**Reasoning:** The NCLT found that the Corporate Debtor admitted to the debt and default. The Financial

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**Interpretation:** The Adjudicating Authority must be satisfied that a default has occurred before

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**Application:** The NCLT was satisfied that the debt and default were established based on the

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## Parties

- **Judges:** Rajeswara Rao…; Ashok Kumar…
- **Appellants:** M/s. Reliance…
- **Respondents:** M/s. Fortuna…
- **Advocates:** S.S. Nag…; M.G. Nan…; +2 more

## Timeline

- **2016-01-01 — Enactment…**: The Insolvency and Bankruptcy…
- **2017-03-31 — Default…**: The Corporate Debtor defaulted on a total…

## 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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