# In the matter of Krishna Assets Developers Private Limited Company Petition No. (IB)-626(PB)-2019

> NCLT judgment dated 2019-09-24. Citation: TCN-2019-NCLT-01278. Mrs. Ruby Kumari, a financial creditor, filed an application under Section 7 of the Insolvency…

- **Court:** NCLT
- **Order date:** 24 Sept 2019
- **Citation:** TCN-2019-NCLT-01278
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/krishna-assets-developers-private-limited-company-petition-no-ib-626pb-2019-efbc1ae2

## Summary

### Background

Mrs. Ruby Kumari, a financial creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against M/s Krishna Assets Developers Private Limited, the corporate debtor. The applicant claimed that the corporate debtor had defaulted on a financial debt. The applicant had invested in the corporate debtor's project '3 Dimension' and made payments totaling Rs. 4,50,000/- for booking an under-construction flat. An Apartment Buyer's Agreement was executed, but the corporate debtor failed to execute the contract, and construction work stopped. The applicant alleged that no building construction work was going on and that they had not received any communication from the corporate

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## Facts

Mrs. Ruby Kumari, the applicant, is a financial creditor who invested in the '3 Dimension' project of M/s Krishna Assets Developers Private Limited, the corporate debtor. The applicant made payments totaling Rs. 4,50,000/- to the corporate debtor for booking an under-construction flat. The payments were made via cheques between October 2015 and April 2016. An Apartment Buyer's Agreement was executed on 22.05.2016 for a residential unit with a super area of 136.10 sq mtr, with a total sale consideration of Rs. 55,21,203/-. The corporate debtor failed to execute the contract, and construction work stopped. The applicant alleged that no construction work was ongoing and that they had not received any communication from the corporate debtor. A legal notice dated 13.08.2018

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## Issues and analysis

### Issue 1: Whether the applicant, being a home buyer, qualifies as a 'financial creditor' under Section 5(7) …

**Ratio:** The ratio is based on the amended definition of 'financial debt' under Section 5(8) of

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**Reasoning:** The NCLT reasoned that the applicant, having invested in the corporate debtor's real

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**Interpretation:** The interpretation of Section 5(8) of the IBC, particularly after the 2018

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**Application:** In this case, the applicant disbursed Rs. 4,50,000/- to the corporate debtor

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## Parties

- **Judges:** CHIEF JUSTICE…; S. K. MOH…
- **Appellants:** Ruby Ku…
- **Respondents:** M/s Krishna…

## Timeline

- **2015-10-01 — Corporate Debtor…**: The corporate debtor, through its Directors, approached the applicant to invest in the…
- **2015-10-16 — Initial Payment by…**: The applicant made an initial payment of Rs. 1,00,000/- via cheque number 002766 drawn on…

## 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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