# In the matter of Sabari Realtors Private Limited IBA-471-2019

> NCLT judgment dated 2019-09-30. Citation: TCN-2019-NCLT-01179. The case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 30 Sept 2019
- **Citation:** TCN-2019-NCLT-01179
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/sabari-realtors-private-limited-iba-471-2019-ab2787c4

## Summary

### Background

The case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, by Mr. Rakesh P. Sheth, the Financial Creditor, against M/s. Sabari Realtors Private Limited, the Corporate Debtor. The application seeks to initiate the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, declare a moratorium, and appoint an Interim Resolution Professional (IRP). The Financial Creditor and Corporate Debtor had entered into an Agreement of Sale on 2010-10-25 for purchase of a flat. The Corporate Debtor failed to complete the construction as per the agreement, leading to disputes and the Financial Creditor seeking a refund.

## Facts

On 2010-10-25, the Financial Creditor (Mr. Rakesh P. Sheth) and the Corporate Debtor (M/s. Sabari Realtors Private Limited) entered into an Agreement of Sale for Flat No. 904 in Tower Ashoka, a complex belonging to the Corporate Debtor. The agreement stipulated a three-month period for the execution of UDS in favor of the Financial Creditor. The Construction Agreement, also dated 2010-10-25, specified a 24-month completion period with a 3-month grace period. The Financial Creditor made a payment of Rs. 13,90,100 to the Corporate Debtor on 2011-07-02. The construction progressed slowly, not meeting the agreed timelines. On 2012-03-17, the Financial Creditor sent a letter to the Corporate Debtor to cancel the flat and requested a refund. The Corporate Debtor, on

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor 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 court considered the documents and evidence presented by the Financial Creditor,

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

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**Application:** The Financial Creditor, Mr. Rakesh P. Sheth, filed the application under

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## Parties

- **Judges:** CH. MOHD SHARIEF…; Anil Ku…
- **Respondents:** M/s. Sabari…

## Timeline

- **2010-10-25 — Agreement o…**: Financial Creditor and Corporate Debtor…
- **2011-07-02 — Payment by Financial…**: Financial Creditor made a payment of Rs.…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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