# In the matter of Kumar Urban Development Private
Limited IA 1705 & 1709 OF 2020 in CP (IB) -960 & 961-&BP-MB-2020

> NCLT judgment dated 2021-04-28. Citation: TCN-2021-NCLT-02261. JM Financial Trustee Company Private Limited filed two petitions (CP 960/2020 and CP 961/2020)…

- **Court:** NCLT
- **Order date:** 28 Apr 2021
- **Citation:** TCN-2021-NCLT-02261
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/kumar-urban-development-private-limited-ia-1705-1709-of-2020-in-cp-ib-960-961-bp-116ac825

## Summary

### Background

JM Financial Trustee Company Private Limited filed two petitions (CP 960/2020 and CP 961/2020) under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against Kumar Urban Development Private Limited (Corporate Debtor). These petitions were filed due to the Corporate Debtor's default in repayment of credit facilities and bank guarantees. Previously, similar petitions (CP No. 1937 of 2019 and CP 2053 of 2019) were filed by the same petitioner against the same Corporate Debtor, which were later withdrawn after the parties entered into consent terms on 09.12.2019 for full and final settlement. The current petitions were filed because of an alleged breach of these consent terms.

## Facts

JM Financial Trustee Company Private Limited, acting as the trustee of JM Financial Property Fund I, filed petitions CP 960/2020 and CP 961/2020 against Kumar Urban Development Private Limited (KUDL), seeking to initiate Corporate Insolvency Resolution Process (CIRP) under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016. The basis for the petitions was the alleged default by KUDL in repaying credit facilities and bank guarantees. Previously, JM Financial had filed CP No. 1937 of 2019 and CP 2053 of 2019 against KUDL, but these were withdrawn after the parties entered into consent terms on 09.12.2019 for a full and final settlement. The consent terms stipulated that KUDL would pay Rs. 150 crores in installments. The current petitions were filed because JM

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor committed a default under Section 7 of the Insolvency and Bankruptcy …

**Ratio:** Section 7 of the Insolvency and Bankruptcy Code, 2016 allows a financial creditor to

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**Reasoning:** The NCLT found that the Corporate Debtor failed to make timely payments as per the

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**Interpretation:** Section 7 provides a mechanism for financial creditors to recover their dues

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**Application:** The NCLT applied Section 7 to the facts of the case and found that the

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## Parties

- **Judges:** H.V. Subb…; Chandra Bha…
- **Appellants:** JM Financial…
- **Respondents:** Kumar Urban…

## Timeline

- **2019-05-15 — Previous Petiti…**: JM Financial Trustee Company Private Limited filed CP No. 1937/2019 and CP No. 2053/2019…
- **2019-12-09 — Consent Terms…**: The parties entered into consent terms for full and final settlement of the amounts…

## 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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