# In the matter of Riyasat Towers Private Limited C.P.No.IB-1392-(ND)-2019

> NCLT judgment dated 2019-10-22. Citation: TCN-2019-NCLT-00865. Catalyst Trusteeship Limited filed an application under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 22 Oct 2019
- **Citation:** TCN-2019-NCLT-00865
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/riyasat-towers-private-limited-cpnoib-1392-nd-2019-5c8a0c9e

## Summary

### Background

Catalyst Trusteeship Limited filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against Riyasat Towers Private Limited due to an alleged default of Rs. 217.77 crores. Riyasat Towers issued secured redeemable non-convertible debentures to raise funds for a real estate development project named 'Raheja India Towers'. Catalyst Trusteeship acted as the trustee for the debenture holders. The debentures were issued in two tranches, Debenture-I and Debenture-II, with specific terms regarding interest, redemption, and tenure. Riyasat Towers allegedly defaulted on its obligations under the Debenture Trust Deeds, including failing to pay interest and meet project milestones. Catalyst

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## Facts

Catalyst Trusteeship Limited filed an application to initiate Corporate Insolvency Resolution Process (CIRP) against Riyasat Towers Private Limited under Section 7 of the Insolvency and Bankruptcy Code, 2016. Riyasat Towers issued 2600 secured redeemable non-convertible debentures to raise funds for a real estate project named 'Raheja India Towers' in Sector 88A, Gurugram. Catalyst Trusteeship acted as the trustee for the debenture holders. Debenture-I was issued to raise INR 95.00 crores, and Debenture-II was issued to raise INR 35.00 crores. The debentures carried a 12% per annum interest rate, payable monthly. Riyasat Towers allegedly defaulted on its obligations under the Debenture Trust Deeds, including failing to pay interest and meet project milestones. Catalyst

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## Issues and analysis

### Issue 1: Whether the application filed by Catalyst Trusteeship Limited under Section 7 of the Insolvency and …

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

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**Reasoning:** The Tribunal considered the documents and arguments presented by both parties and found

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**Interpretation:** Section 7 provides the mechanism for a financial creditor to trigger the

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

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## Parties

- **Judges:** P.S.N. P…; V.K. SUB…
- **Appellants:** Catalyst Trusteesh…
- **Respondents:** RIYASAT TOWERS…

## Timeline

- **2017-02-17 — Consent L…**: Respondent obtained consent of…
- **2017-04-12 — Trustee Agr…**: Respondent and Applicant…

## 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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