# In the matter of Mithiya Developers Private Limited CP (IB) -3243-I&BP-MB-2018

> NCLT judgment dated 2018-12-06. Citation: TCN-2018-NCLT-00161. Indiabulls Housing Finance Limited filed a petition seeking Corporate Insolvency Resolution…

- **Court:** NCLT
- **Order date:** 6 Dec 2018
- **Citation:** TCN-2018-NCLT-00161
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/mithiya-developers-private-limited-cp-ib-3243-ibp-mb-2018-88a0e0ab

## Summary

### Background

Indiabulls Housing Finance Limited filed a petition seeking Corporate Insolvency Resolution Process (CIRP) against Mithiya Developers Private Limited, alleging a default of Rs. 83,61,33,208/- as of 21.08.2018. The petitioner had sanctioned a loan of Rs. 51,00,00,000/- to the corporate debtor on 09.09.2015 for acquisition and development of residential units, carrying an interest of 18.75% p.a., repayable within 60 months. The loan was secured by a pledge of shares and a mortgage of the residential property 'Palais Royal'. The corporate debtor contested the petition, arguing that the petitioner was not merely a financial creditor but had a vested interest in the 'Palais Royale' project undertaken by Shree Ram Urban Infrastructure Limited (SRUIL), of which the petitioner

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## Facts

Indiabulls Housing Finance Limited (the Petitioner) sanctioned a loan of Rs. 51,00,00,000/- to Mithiya Developers Private Limited (the Corporate Debtor) on 09.09.2015 for acquisition and development of residential units. The loan carried an interest rate of 18.75% p.a. and was repayable within 60 months. The loan was secured by a 100% pledge of shares of the Corporate Debtor and a registered mortgage of the residential property 'Palais Royal'. The Corporate Debtor defaulted on 21.08.2018 to the extent of Rs. 83,61,33,208/- including interest @18.80% p.a. The Petitioner issued a SARFAESI notice on 06.08.2018, claiming Rs. 82,04,96,567/- as on 17.07.2018. The Corporate Debtor argued that the Petitioner was not merely a financial creditor but had a vested interest in the

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## Issues and analysis

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

**Ratio:** The ratio is based on the interpretation of Section 7 of the IBC, which allows a

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**Reasoning:** The NCLT reasoned that the Corporate Debtor's arguments regarding the Petitioner's

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**Interpretation:** Section 7 of the IBC is interpreted to mean that if a financial debt exists and

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**Application:** The NCLT applied the ratio to the facts of the case, finding that a financial

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## Parties

- **Judges:** Bhaskara Pantula…; V. Nallasen…
- **Appellants:** Indiabulls…
- **Respondents:** Mithiya Developers…
- **Advocates:** Gaurav…; Chirag K…; +5 more

## Timeline

- **2015-09-09 — Loan Sanc…**: Indiabulls Housing Finance Limited sanctioned a loan of Rs. 51,00,00,000/- to Mithiya…
- **2015-09-28 — Loan Agreement…**: A loan agreement was executed between Indiabulls Housing Finance Limited and Mithiya…

## 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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