# 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-00766. The case involves a petition filed under Section 7 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 31 Oct 2019
- **Citation:** TCN-2019-NCLT-00766
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/jassum-propcon-projects-private-limited-cp-no-ib-1756pb-2018-a145d2db

## Summary

### Background

The case involves a petition filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, by financial creditors (allottees of a real estate project) against Jassum Propcon Projects Private Limited, the corporate debtor. The petitioners sought to initiate the Corporate Insolvency Resolution Process (CIRP) due to defaults in payments related to a commercial space purchase agreement. The petitioners and the respondent had entered into a space buyer's agreement in 2014, with the petitioners paying a significant upfront amount. A buy-back agreement was also in place, but the respondent failed to honor the buy-back commitment, and cheques issued for this purpose were dishonored.

## Facts

Jagat Pal Paliwal and another (the Petitioners) entered into a space buyer's agreement with Jassum Propcon Projects Private Limited (the Respondent) on 2014-07-31 for a commercial space in ABW Tower, IFFCO Chowk, Gurgaon. The total cost of the space was Rs. 41.25 Lakhs, and the Petitioners paid Rs. 41.00 Lakhs upfront. A buy-back agreement was also executed, allowing the Respondent to buy back the space within 12 months for Rs. 46.25 lakhs plus interest. The Respondent issued cheques towards the buyback commitment, but they were dishonored with the endorsement 'Account Blocked'. The Petitioners served legal notices under Section 138 of the Negotiable Instruments Act. The Respondent failed to deliver possession of the commercial space or make payments towards interest.

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## Issues and analysis

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

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

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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 Supreme Court's judgment

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**Application:** The petitioners, being allottees of a commercial space in the respondent's

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## Parties

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

## Timeline

- **2014-07-31 — Space Buyer's…**: Petitioners and Respondent entered into a space…
- **2014-07-31 — Buy-Back Ag…**: A buy-back agreement was executed, allowing the Respondent to buy back the space within…

## 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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