# In the matter of Morpheus Developers Private Limited C.P. No. IB-949(PB)-2018

> NCLT judgment dated 2019-02-12. Citation: TCN-2019-NCLT-04881. The case involves an application filed by Mr. Kapil Arora, a financial creditor, under Section…

- **Court:** NCLT
- **Order date:** 12 Feb 2019
- **Citation:** TCN-2019-NCLT-04881
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/morpheus-developers-private-limited-cp-no-ib-949pb-2018-97eb1cf7

## Summary

### Background

The case involves an application filed by Mr. Kapil Arora, a financial creditor, under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Morpheus Developers Private Limited, the corporate debtor. The application seeks to initiate the Corporate Insolvency Resolution Process (CIRP) against the corporate debtor. The financial creditor claims that the corporate debtor defaulted on repayment of a principal amount of Rs. 1,00,00,000/- which was given as a loan via an MoU dated 23.12.2013 for funding a flat. Subsequent to the initial MoU, another MoU was entered on 04.10.2014 where the corporate debtor acknowledged receiving the sum and agreed to allot two flats in another project. The corporate debtor also acknowledged its liability to pay mutually agreed

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## Facts

Mr. Kapil Arora, the financial creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Morpheus Developers Private Limited, the corporate debtor. The financial creditor claimed that a principal amount of Rs. 1,00,00,000/- was given to the corporate debtor as a loan via an MoU dated 23.12.2013 for funding a flat. The corporate debtor failed to repay the principal amount and also failed to deliver possession of the allotted units by December 2017. Another MoU was entered on 04.10.2014 where the corporate debtor acknowledged receiving the sum and agreed to allot two flats in another project. The corporate debtor also acknowledged its liability to pay mutually agreed assured returns. The financial creditor submitted that the

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## Issues and analysis

### Issue 1: Whether the application filed by the financial creditor under Section 7 of the Insolvency and …

**Ratio:** Section 7(5) of the IBC states that the Adjudicating Authority shall admit the

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**Reasoning:** The Tribunal observed that the application was filed in the prescribed form and manner as

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**Interpretation:** The provision requires the Adjudicating Authority to be satisfied that a

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**Application:** The Tribunal found that the application was complete and a default had

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## Parties

- **Judges:** M. M. K…; DEEPTI M…
- **Appellants:** Kapil A…
- **Respondents:** Morpheus Developer…

## Timeline

- **2013-12-23 — First Mo…**: Mr. Kapil Arora and Morpheus Developers Private Limited entered into an MoU for funding a…
- **2014-10-04 — Second M…**: Mr. Kapil Arora and Morpheus Developers Private Limited entered into another MoU for…

## 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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