# In the matter of International Recreation and Amusement Ltd. CP No. IB-650-(PB)-2018

> NCLT judgment dated 2018-08-03. Citation: TCN-2018-NCLT-01010. The case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 3 Aug 2018
- **Citation:** TCN-2018-NCLT-01010
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/international-recreation-and-amusement-ltd-cp-no-ib-650-pb-2018-a030e724

## Summary

### Background

The case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, by financial creditors against International Recreation and Amusement Limited, referred to as the corporate debtor. The applicants claimed to be financial creditors who had entered into agreements/Memorandum of Understanding with the corporate debtor for the purchase of commercial/retail units in the Appu Ghar project. The applicants paid a substantial portion of the total sale consideration under an 'Assured Return Plan', where the respondent undertook to pay a particular amount each month as assured returns after 24 months of the MOU. The respondent stopped paying the assured returns after July 2016, leading the applicants to demand payment, which was not fulfilled.

## Facts

Shyam Lal Sachdeva & Ors. filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against International Recreation and Amusement Limited, claiming to be financial creditors. The applicants had entered into agreements/Memorandum of Understanding with the respondent for purchasing commercial/retail units in the Appu Ghar project in Gurugram, Haryana. Under the 'Assured Return Plan', the applicants paid a substantial portion of the total sale consideration, and the respondent was to pay a particular amount each month as assured returns after 24 months of the MOU. The respondent stopped paying the assured returns after July 2016. The Corporate Debtor's identification number is U92412DL2010PLC211303, and its registered office is in Rohini, New

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## Issues and analysis

### Issue 1: Whether the applicants qualify as financial creditors under Section 5(8)(f) of the Insolvency and …

**Ratio:** Section 5(8)(f) of the Insolvency and

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**Reasoning:** The court considered that the applicants had invested amounts covered by the meaning of

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**Interpretation:** The court interpreted Section 5(8)(f) to include the amounts invested by the

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**Application:** The court applied the definition of 'financial debt' to the facts of the case,

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## Parties

- **Judges:** M. M. K…; S. K. MOH…
- **Appellants:** Shyam Lal S…
- **Respondents:** International…

## Timeline

- **2010-12-10 — Incorporation of…**: International Recreation and…
- **2016-07-01 — Cessation of Assured…**: The respondent stopped paying the assured…

## 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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