# In the matter of MMR SAHA Infrastructure Pvt. Ltd. IB-2026(ND)-2019

> NCLT judgment dated 2020-07-22. Citation: TCN-2020-NCLT-00990. The case involves a petition filed by Rajan Arora and others, who are financial creditors,…

- **Court:** NCLT
- **Order date:** 22 Jul 2020
- **Citation:** TCN-2020-NCLT-00990
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/mmr-saha-infrastructure-pvt-ltd-ib-2026nd-2019-9d65fe77

## Summary

### Background

The case involves a petition filed by Rajan Arora and others, who are financial creditors, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against M/s MMR Saha Infrastructure Pvt. Ltd., the corporate debtor, under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016. The financial creditors claimed default in settling an amount of Rs. 97,56,774/-, including interest, towards assured returns promised by the corporate debtor. The creditors had purchased units under an 'assured return scheme' where the debtor was to pay 14% per annum on payments made. The corporate debtor made erratic payments until December 2017, after which payments ceased. The creditors sent legal notices and emails demanding payment, but the debtor cited market conditions and

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## Facts

Rajan Arora and several others, acting as financial creditors, filed a petition to initiate CIRP against M/s MMR Saha Infrastructure Pvt. Ltd. under Section 7 of the IBC. The creditors had purchased units in the corporate debtor's project under an 'assured return scheme'. Financial creditors 1 to 3 purchased a unit for Rs. 2,10,00,000/-, paying Rs. 2,17,00,000/-. Financial creditors 4 to 7 purchased a unit for Rs. 2,01,60,000/-, paying Rs. 1,90,82,810/-. The corporate debtor was to pay an assured return of 14% per annum. The debtor made payments until December 2017 (October/December 2018 for some), after which payments stopped. The creditors sent emails and legal notices demanding payment. The corporate debtor claimed the assured returns were contingent on the

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the IBC is maintainable in the absence of a default as …

**Ratio:** A default, as defined under Section 2(12) of the IBC, is a prerequisite for the

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**Reasoning:** The NCLT reasoned that the major point raised by the corporate debtor was that the debt

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**Interpretation:** Section 2(12) defines 'default' as non-payment of debt when whole or any part

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**Application:** In this case, the NCLT found that the financial creditors failed to produce the

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## Parties

- **Judges:** P.S.N. P…; V.K. SUB…
- **Appellants:** Rajan A…
- **Respondents:** M/s MMR SAHA…

## Timeline

- **2014-02-01 — MOU Date…**: Financial creditors 1 to 3 entered into a Memorandum of Understanding (MOU) for the…
- **2005-02-03 — MOU Date…**: Financial creditors 4 to 7 entered into a Memorandum of Understanding (MOU) for the…

## 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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