# In the matter of Jassum Propcon Projects Private Limited C.P. No. IB-1756(PB)-2018

> NCLT judgment dated 2019-10-31. Citation: TCN-2019-NCLT-00767. The case involves a petition filed by Jagat Pal Paliwal & Another, claiming to be Financial…

- **Court:** NCLT
- **Order date:** 31 Oct 2019
- **Citation:** TCN-2019-NCLT-00767
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/jassum-propcon-projects-private-limited-cp-no-ib-1756pb-2018-0f8a8716

## Summary

### Background

The case involves a petition filed by Jagat Pal Paliwal & Another, claiming to be Financial Creditors, under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against Jassum Propcon Projects Private Limited, the Corporate Debtor. The petitioners, as allottees of a real estate project, entered into a space buyer's agreement with the respondent for a commercial space in Gurgaon. They paid a significant upfront amount, but the possession of the space was not delivered, and the respondent's cheques towards buyback commitment bounced. The petitioners then served legal notices and filed the petition under Section 7.

## Facts

Jagat Pal Paliwal & Another (the Petitioners) filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) against Jassum Propcon Projects Private Limited (the Respondent), seeking to initiate Corporate Insolvency Resolution Process (CIRP). The Petitioners, claiming to be Financial Creditors, are allottees of a real estate project developed by the Respondent. They entered into a space buyer's agreement dated 31.07.2014 for a commercial space in Gurgaon, paying Rs. 41.00 Lakhs out of a total cost of Rs. 41.25 Lakhs. The Respondent also entered into a buyback agreement dated 31.07.2014, with an interest rate of 19.5% per annum, later amended to 26% per annum. The Respondent issued cheques towards interest and part payments of the buyback

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## Issues and analysis

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

**Ratio:** Section 5(8)(f) of the IBC defines 'financial debt' to include any amount raised under a

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**Reasoning:** The court relied on the Supreme Court's judgment in Pioneer Urban Land and Infrastructure

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**Interpretation:** The interpretation of Section 5(8)(f) and the related explanation is that real

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**Application:** In this case, the petitioners, being allottees of a commercial space in a real

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## Parties

- **Judges:** M. M. K…; S. K. MOH…
- **Appellants:** Jagat Pal P…
- **Respondents:** Jassum Propcon…

## Timeline

- **1984-12-05 — Incorporation of…**: Jassum Propcon Projects…
- **2014-07-31 — Space Buyer's…**: Petitioners entered into a space buyer's agreement with the respondent for a commercial…

## 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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