# In the matter of IERO Fiveriver Pvt. Ltd. C.P. No. IB-355-ND-2017

> NCLT judgment dated 2017-11-13. Citation: TCN-2017-NCLT-00214. The case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 13 Nov 2017
- **Citation:** TCN-2017-NCLT-00214
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/iero-fiveriver-pvt-ltd-cp-no-ib-355-nd-2017-fbdf43ea

## Summary

### Background

The case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, by financial creditors against IERO Fiveriver Pvt. Ltd., the corporate debtor. The financial creditors claimed to have invested in a project promoted by the corporate debtor, with a provisional plot allotment letter issued in 2011. Despite payments made towards the plot, the corporate debtor failed to fulfill its obligations, leading the financial creditors to seek repayment. A settlement deed was later executed, but subsequent cheques issued by the corporate debtor were dishonored.

## Facts

On 16.08.2010, the Financial Creditors invested Rs. 10.00 lakhs in a project by IERO Fiveriver Pvt. Ltd. On 18.05.2011, a provisional plot allotment letter was issued. The Financial Creditors paid Rs. 15,11,600/- for the plot. A Plot Buyers' Agreement was entered on 27.06.2011. Further payments were made on 18.05.2015 (Rs. 21,19,627/-), 13.09.2015 (Rs. 21,75,674/-), and 31.03.2016 (Rs. 21,97,649/-). The Corporate Debtor failed to fulfill obligations, and the Financial Creditor sought repayment on 10.11.2016. A Settlement Deed was executed on 15.02.2017, with the Corporate Debtor agreeing to repay Rs. 1,16,05,751/- with 9% interest. A cheque for Rs. 13,80,977/- was honored, but subsequent cheques dated 13.08.2017 for Rs. 14,36,162/- and Rs. 14,36,161/- were dishonored

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## Issues and analysis

### Issue 1: Whether the applicants are Financial Creditors …

**Ratio:** The legal principle is based on the definition of 'Financial Creditor' under Section 5(7)

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**Reasoning:** The tribunal reasoned that the amounts paid by the Financial Creditors were treated as a

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**Interpretation:** The interpretation of 'Financial Creditor' involves determining whether the

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**Application:** The tribunal applied the ratio to the facts by considering the Settlement Deed,

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## Parties

- **Judges:** R. VARADH…
- **Appellants:** Ajay Kumar…
- **Respondents:** IERO Fiveriver…

## Timeline

- **2010-08-16 — Initial Inv…**: Financial Creditors invested Rs. 10.00 lakhs…
- **2011-05-18 — Plot Allo…**: A provisional plot…

## 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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