# In the matter of Neelkamal Grih Nirman Private Limited C.P. (IB)No. 1831-KB-2019

> NCLT judgment dated 2021-08-05. Citation: TCN-2021-NCLT-01444. Ashish Vincom Private Limited, the Financial Creditor, filed an application under Section 7 of…

- **Court:** NCLT
- **Order date:** 5 Aug 2021
- **Citation:** TCN-2021-NCLT-01444
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/neelkamal-grih-nirman-private-limited-cp-ibno-1831-kb-2019-4d1009a7

## Summary

### Background

Ashish Vincom Private Limited, the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against Neelkamal Grih Nirman Private Limited, the Corporate Debtor. The Financial Creditor claimed that the Corporate Debtor approached them for the sale of a flat and a covered car parking space for a total amount of Rs. 50,00,000/-. The Financial Creditor paid an advance of Rs. 5,00,000/- to the Corporate Debtor on 6th March, 2014, which was reflected in the Corporate Debtor's balance sheets as 'Advance against Property'. The Financial Creditor alleged that the Corporate Debtor defaulted on delivering the flat by 30th September, 2016, and failed to refund the

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## Facts

1. Ashish Vincom Private Limited (Financial Creditor) claimed that Neelkamal Grih Nirman Private Limited (Corporate Debtor) approached them for the sale of a flat of 1600 sq ft. and one covered car parking space for a total amount of Rs. 50,00,000/- at the Corporate Debtor's proposed project site.
2. The Financial Creditor paid an advance of Rs. 5,00,000/- to the Corporate Debtor on 6th March, 2014, via bank transfer.
3. The Financial Creditor relied on a Development Agreement dated 12th May, 2013, between the Corporate Debtor and Srijan Mondal and others (landowners).
4. The Financial Creditor claimed that the Corporate Debtor assured them that the flat would be delivered by 30th September, 2016, and in case of delay, the advance amount would be refunded with 18%

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial …

**Ratio:** The initiation of CIRP under Section 7 of the IBC requires the existence of a 'financial

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**Reasoning:** The NCLT reasoned that the Financial Creditor failed to prove that the amount advanced

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**Interpretation:** Section 7 of the IBC allows a financial creditor to initiate CIRP against a

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**Application:** Since the NCLT found that the Financial Creditor failed to prove that the

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## Parties

- **Judges:** Rajasekha…; Harish Chander…
- **Appellants:** Ashish Vincom…
- **Respondents:** Neelkamal Grih…

## Timeline

- **2013-05-12 — Development A…**: Development Agreement dated 12th May, 2013 entered into by the Corporate Debtor with…
- **2014-03-06 — Advance P…**: Financial Creditor paid an advance of Rs. 5,00,000/- to the Corporate Debtor via bank…

## 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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