# In the matter of Prabhudarshan Developers Private Ltd. CP (IB) No. 1826-KB-2019

> NCLT judgment dated 2020-02-05. Citation: TCN-2020-NCLT-02078. The case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 5 Feb 2020
- **Citation:** TCN-2020-NCLT-02078
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/prabhudarshan-developers-private-ltd-cp-ib-no-1826-kb-2019-09c42a9a

## Summary

### Background

The case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, by Anil Agarwal, a home-buyer, against Prabhudarshan Developers Private Ltd., the Corporate Debtor, for initiating the Corporate Insolvency Resolution Process (CIRP). The application is based on the Corporate Debtor's alleged default in paying a financial debt of Rs. 54,26,539/- and/or failing to provide peaceful possession of a premises.

## Facts

Anil Agarwal, a home-buyer, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Prabhudarshan Developers Private Ltd. The application was based on the Corporate Debtor's failure to pay a financial debt of Rs. 54,26,539/- and/or failure to provide peaceful possession of a premises bearing no. "4F-3", in Block-4, in the 3rd floor in a building proposed to be named as "Prabhu Orchard” situated at Mouza-Rasapunja, Pargana, Police Station- Bishnupur, District- 24 Parganas (South). The Financial Creditor produced an agreement of sale dated 18.02.2016, which stated that the Corporate Debtor was to complete construction by December 2018. The Corporate Debtor failed to give possession of the flat as agreed, prompting the

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor under Section 7 of the Insolvency & …

**Ratio:** Section 7 of the Insolvency & Bankruptcy Code, 2016, allows a financial creditor to

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**Reasoning:** The court found that the Financial Creditor had established that there was a debt due and

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**Interpretation:** Section 7 provides a mechanism for financial creditors to recover their dues by

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**Application:** The court applied Section 7 to the facts of the case, finding that the

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## Parties

- **Judges:** Madan B.…; Virendra Kumar…
- **Appellants:** Anil Ag…
- **Respondents:** Prabhudarshan…

## Timeline

- **2016-02-18 — Agreement o…**: Agreement of sale between the Financial…
- **2018-12-01 — Completio…**: Scheduled completion date for the construction of the flat/unit and car parking space as…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(8) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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