# In the matter of Invest Care Real Estate LLP C.P. No. IB-987(ND)-2019

> NCLT judgment dated 2019-11-26. Citation: TCN-2019-NCLT-00452. Rita Kapoor filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 26 Nov 2019
- **Citation:** TCN-2019-NCLT-00452
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/invest-care-real-estate-llp-cp-no-ib-987nd-2019-d284f470

## Summary

### Background

Rita Kapoor filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, claiming to be a financial creditor of Invest Care Real Estate LLP. The respondent, Invest Care Real Estate LLP, was incorporated on 30.11.2010. The applicant claimed that a loan agreement was documented with Sh. Samar Vijay, and Rs. 40,00,000/- out of Rs. 50,00,000/- advanced by cheque was documented as a loan, with the petitioner inducted as a 'New Partner'. The applicant alleged that a supplementary agreement dated 13.04.2013 was executed, taking the loan as an equity contribution. The respondents allegedly provided a copy of a resolution to convert loan capital to equity without the consent of the 'Promoting Partner', violating clause 18(b) of the LLP agreement. The

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## Facts

Rita Kapoor, claiming to be a financial creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Invest Care Real Estate LLP. Invest Care Real Estate LLP was incorporated on 30.11.2010. Rita Kapoor claimed that a loan agreement was documented with Sh. Samar Vijay, and Rs. 40,00,000/- out of Rs. 50,00,000/- advanced by cheque was documented as a loan, with Rita Kapoor inducted as a 'New Partner'. A supplementary agreement dated 13.04.2013 was allegedly executed, taking the loan as an equity contribution. The respondents allegedly provided a copy of a resolution to convert loan capital to equity without the consent of the 'Promoting Partner', violating clause 18(b) of the LLP agreement. Legal notices were sent seeking specific

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## Issues and analysis

### Issue 1: Whether the applicant can be termed as a financial creditor under Section 7 of the Insolvency and …

**Ratio:** A financial creditor is defined under the Insolvency and Bankruptcy Code as a person to

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**Reasoning:** The court reasoned that the loan given by the applicant was converted into a capital

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**Interpretation:** The interpretation of 'financial creditor' under the IBC hinges on the nature

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**Application:** In this case, the court found that the loan was converted into equity, thus

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## Parties

- **Judges:** P.S.N. P…; V.K. SUB…
- **Appellants:** Rita Ka…
- **Respondents:** Invest Care Real…
- **Advocates:** Ranvir…; Vivek S…; +2 more

## Timeline

- **2010-11-30 — Incorporation of Invest…**: Invest Care Real Estate…
- **2011-07-14 — Formation of Invest…**: Sh. Ajit Sinha and Ajit Mishra…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60 — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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