# In the matter of JBM Shelters Private Limited IBA-826-2020

> NCLT judgment dated 2021-09-07. Citation: TCN-2021-NCLT-01164. The case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 7 Sept 2021
- **Citation:** TCN-2021-NCLT-01164
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/jbm-shelters-private-limited-iba-826-2020-017523f3

## Summary

### Background

The case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, by LICHFL Trustee Company Private Limited, acting as the trustee of LICHFL Urban Development Fund, against JBM Shelters Private Limited, the Corporate Debtor. The Financial Creditor sought to initiate the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, declare a moratorium, and appoint an Interim Resolution Professional (IRP). The Financial Creditor claimed a financial debt of Rs. 68,64,47,800/- with a date of default of 2018-09-27. The Corporate Debtor argued that the application should be dismissed, contending that the Financial Creditor was essentially a joint developer in a real estate project and that the application was barred by

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## Facts

LICHFL Trustee Company Private Limited, acting as the trustee of LICHFL Urban Development Fund, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against JBM Shelters Private Limited, seeking to initiate the Corporate Insolvency Resolution Process (CIRP). The Financial Creditor claimed a financial debt of Rs. 68,64,47,800/-, with the date of default mentioned as 2018-09-27. The Corporate Debtor stood as a Corporate Guarantor for JBM Homes Private Limited, the Principal Borrower, towards the amount invested in the form of debentures by the Financial Creditor. The Principal Borrower and the promoters had entered into a Share Subscription cum Debenture Subscription and Shareholders Agreement on 2015-03-23. The Principal Borrower proposed to

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## Issues and analysis

### Issue 1: Whether the claim of the Application qualifies to be a 'financial debt' and as a consequence …

**Ratio:** The definition of 'financial debt' under Section 5(8) of the IBC, 2016, includes any

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**Reasoning:** The Tribunal referred to the judgment of the Hon'ble NCLAT in India Power Corporation

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**Interpretation:** The definition of 'financial debt' is broad enough to include amounts raised

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**Application:** In this case, the Financial Creditor invested in the Corporate Debtor through

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## Parties

- **Judges:** R. Sucha…; Anil Ku…
- **Appellants:** LICHFL TRUSTEE…
- **Respondents:** JBM Shelters…
- **Advocates:** R. Shankaranarayan…; Vinod K…; +2 more

## Timeline

- **2015-03-23 — Share Subscription…**: Principal Borrower and promoters entered into a Share Subscription cum Debenture…
- **2015-04-09 — Corporate Gu…**: Corporate Debtor executed a…

## 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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