# In the matter of Mounthill Realty Pvt. Ltd. CP (IB) No. 1720-KB-2018

> NCLT judgment dated 2019-12-09. Citation: TCN-2019-NCLT-00277. The case involves an application under Section 7 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 9 Dec 2019
- **Citation:** TCN-2019-NCLT-00277
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/mounthill-realty-pvt-ltd-cp-ib-no-1720-kb-2018-ae8a98c6

## Summary

### Background

The case involves an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, filed by financial creditors (home buyers represented by Deves Damani) against Mounthill Realty Pvt. Ltd. (the corporate debtor) for initiating the Corporate Insolvency Resolution Process (CIRP). The financial creditors claimed that the corporate debtor defaulted on a financial debt of Rs. 7,56,11887.10. The home buyers had entered into agreements to purchase residential flats in a housing project developed by the corporate debtor, with a completion date agreed upon as June 2016, extendable by six months. The corporate debtor failed to provide possession of the flats.

## Facts

Sixteen home buyers, represented by Mr. Deves Damani, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Mounthill Realty Pvt. Ltd., the corporate debtor, for initiating the Corporate Insolvency Resolution Process (CIRP). The financial creditors claimed a default of Rs. 7,56,11887.10. An agreement dated 15-09-2013 stipulated that the home buyers would purchase residential flats in a project developed by the corporate debtor. The buyers paid the purchase price as per the agreed schedule. Clause 9.5 of the agreement specified a completion date of June 2016, with a possible six-month extension. The corporate debtor failed to provide possession of the flats by the agreed date. A Memorandum of Understanding (MOU) dated 05-04-2019, was

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## Issues and analysis

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

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

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**Reasoning:** The court reasoned that the financial creditors, being home buyers, are recognized as

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**Interpretation:** Section 7 of the IBC provides a mechanism for financial creditors to initiate

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**Application:** The court applied this to the facts by noting that the applicants, as home

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## Parties

- **Judges:** Madan B.…; Virendra Kumar…
- **Appellants:** Deves Daman…
- **Respondents:** Mounthill Realty…

## Timeline

- **2013-09-15 — Agreement…**: All 16 home buyers agreed to purchase residential flats in the housing project being…
- **2016-06-01 — Original Comple…**: Original completion date for the construction and making the flats in habitable condition…

## 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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