# In the matter of Lokhandwala Infrastructure Private Limited C.P. (IB) No. 1023-NCLT-MB-2019

> NCLT judgment dated 2019-09-19. Citation: TCN-2019-NCLT-01362. Dalmia Group Holdings, acting as the financial creditor, filed an application under Section 7…

- **Court:** NCLT
- **Order date:** 19 Sept 2019
- **Citation:** TCN-2019-NCLT-01362
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/lokhandwala-infrastructure-private-limited-cp-ib-no-1023-nclt-mb-2019-e20a3867

## Summary

### Background

Dalmia Group Holdings, acting as the financial creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Lokhandwala Infrastructure Private Limited, the corporate debtor, for initiating the Corporate Insolvency Resolution Process (CIRP). The application was based on a total default of ₹36,98,28,139/-, including interest as of 15.02.2019. The financial arrangement stemmed from a Memorandum of Understanding (MOU) dated 04.04.2016, where Dalmia Group Holdings agreed to provide financial facilities to Lokhandwala Infrastructure by purchasing six commercial units in their project, with Lokhandwala retaining the right to buy back the units.

## Facts

Dalmia Group Holdings (Financial Creditor) and Lokhandwala Infrastructure Private Limited (Corporate Debtor) entered into a Memorandum of Understanding (MOU) on 04.04.2016. Dalmia Group Holdings agreed to provide financial facilities to Lokhandwala Infrastructure by purchasing six commercial units in Lokhandwala's commercial project named "Lokhandwala Business Bay". The total consideration for buying the said floors was ₹41,16,96,000/-, out of which Dalmia Group Holdings disbursed ₹25,00,00,000/- as advance. Lokhandwala Infrastructure retained the right to buy back the commercial units after 24 months but before 36 months from the date of advance. As per the MOU, Lokhandwala Infrastructure was to repay quarterly interest at 21% per annum. Lokhandwala

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the …

**Ratio:** The Adjudicating Authority is required to satisfy itself that a default has occurred

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**Reasoning:** The NCLT determined that the application under Section 7 of the I&B Code, 2016, was

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**Interpretation:** Section 7 of the I&B Code, 2016, outlines the procedure for initiating the

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**Application:** The NCLT applied the provisions of Section 7 of the I&B Code, 2016, to the

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## Parties

- **Judges:** Mr V. P.…; Mr Rajesh…
- **Appellants:** Dalmia Group…
- **Respondents:** Lokhandwala…

## Timeline

- **2016-04-04 — MOU Date…**: Applicant and Respondent entered…
- **2019-03-12 — Application…**: The Application was…

## 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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