# In the matter of Raghuleela Builders Private Limited CP No. 498-(IB)-MB-V-2021

> NCLT judgment dated 2021-10-04. Citation: TCN-2021-NCLT-00891. Moon Star Securities Trading & Finance Co. Ltd. filed a petition under Section 7 of the…

- **Court:** NCLT
- **Order date:** 4 Oct 2021
- **Citation:** TCN-2021-NCLT-00891
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/raghuleela-builders-private-limited-cp-no-498-ib-mb-v-2021-64336982

## Summary

### Background

Moon Star Securities Trading & Finance Co. Ltd. filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Raghuleela Builders Private Limited, claiming default on an Inter Corporate Deposit (ICD). The petitioner, acting as a financial creditor, sought to initiate the Corporate Insolvency Resolution Process (CIRP) against the corporate debtor due to non-payment of dues. The corporate debtor contested the petition, arguing that the petitioner was not a legal entity and that the debt was adjusted towards the sale consideration of a property. The petitioner refuted these claims, asserting its legal status and disputing the adjustment of debt.

## Facts

Moon Star Securities Trading & Finance Co. Ltd. (Petitioner) extended an Inter Corporate Deposit (ICD) of Rs. 10,00,00,000 to Raghuleela Builders Private Limited (Corporate Debtor) for 121 days, disbursed on 29.05.2018, with an interest rate of 21% per annum. The Corporate Debtor failed to repay the ICD within the agreed period. On 25.09.2018, the Corporate Debtor issued a communication confirming the renewal of the ICD for another 121 days, from 29.09.2018 to 28.01.2019, with an increased interest rate of 22% per annum. The Corporate Debtor issued five cheques payable at par, which were deposited by the Petitioner but bounced. The Corporate Debtor issued another cheque on 24.04.2019, which was also returned due to insufficient funds. The outstanding amount as of

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## Issues and analysis

### Issue 1: Whether the Petitioner, Moon Star Securities Trading & Finance Co. Ltd., qualifies as a …

**Ratio:** Section 5(7) of the Insolvency and Bankruptcy Code, 2016, defines a 'Financial Creditor'

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**Reasoning:** The court examined the petitioner's incorporation certificate and master data, confirming

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**Interpretation:** The interpretation of Section 5(7) is broad enough to include any entity,

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**Application:** The court applied the definition of 'Financial Creditor' to the facts of the

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## Parties

- **Judges:** SUCHITRAKAN…; Chandra Bha…
- **Appellants:** Moon Star…
- **Respondents:** Raghuleela…

## Timeline

- **2018-05-29 — ICD Disb…**: Moon Star Securities Trading & Finance Co. Ltd. disbursed an Inter Corporate Deposit…
- **2018-09-25 — ICD Renewal Communicatio…**: Raghuleela Builders Private Limited issued a communication confirming the renewal of the…

## 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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