# In the matter of Pal Infrastructure & Developers Private Limited Company Petition No. (IB)-755(PB)-2018

> NCLT judgment dated 2019-09-05. Citation: TCN-2019-NCLT-01549. SCSL Buildwell Private Limited, claiming to be a financial creditor, filed an application under…

- **Court:** NCLT
- **Order date:** 5 Sept 2019
- **Citation:** TCN-2019-NCLT-01549
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/pal-infrastructure-developers-private-limited-company-petition-no-ib-755pb-2018-71b30c25

## Summary

### Background

SCSL Buildwell Private Limited, claiming to be a financial creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, for initiating the Corporate Insolvency Resolution Process (CIRP) against Pal Infrastructure & Developers Private Limited, referred to as the corporate debtor. The financial creditor and corporate debtor entered into an agreement on 2010-12-17, where the financial creditor agreed to purchase 20 flats in a real estate project named "Icon Tower" developed by the corporate debtor. The financial creditor paid INR 7.92 Crore to the corporate debtor. The flats were to be delivered by 2013-11-11. The corporate debtor failed to complete the construction and deliver possession. The applicant invoked the arbitration

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## Facts

SCSL Buildwell Private Limited (the applicant) and Pal Infrastructure & Developers Private Limited (the respondent) entered into an agreement on 2010-12-17, where the applicant agreed to purchase 20 flats in a real estate project named "Icon Tower" developed by the respondent. The applicant paid INR 7.92 Crore to the respondent. The flats were to be delivered by 2013-11-11. The respondent failed to complete the construction and deliver possession. The applicant invoked the arbitration clause, and Mr. Justice G.S. Singhvi was appointed as the Sole Arbitrator on 2014-03-12. The Arbitrator passed an award on 2017-12-22, directing the respondent to refund INR 7.92 Crores with interest. Despite the award, the respondent failed to pay the debts. The applicant

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## Issues and analysis

### Issue 1: Whether the applicant, SCSL Buildwell Private Limited, qualifies as a 'financial creditor' under …

**Ratio:** The definition of 'financial creditor' under Section 5(7) of the IBC includes any person

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**Reasoning:** The NCLT relied on the Supreme Court's judgment in Pioneer Urban Land and Infrastructure

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**Interpretation:** The interpretation of 'financial creditor' has been broadened to include home

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**Application:** Since SCSL Buildwell Private Limited is an allottee who paid money for the

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## Parties

- **Judges:** M. M. K…; S. K. MOH…
- **Appellants:** S.C.S.L. Buildwell…
- **Respondents:** Pal Infrastructure…

## Timeline

- **2010-12-17 — Agreement between Financial Creditor and…**: Financial Creditor agreed to purchase 20 flats in a Real Estate Project named as 'Icon…
- **2013-11-11 — Scheduled Date of Flat…**: Flats were to be delivered by…

## 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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