# In the matter of Sand Dune Construction Pvt. Ltd.

> NCLT judgment dated 16 Jul 2024. Citation: TCN-2024-NCLT-00994. Gateway Welfare Society, a Residents Welfare Association, filed an application under Section 7…

- **Court:** NCLT
- **Order date:** 16 Jul 2024
- **Citation:** TCN-2024-NCLT-00994
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/sand-dune-construction-pvt-ltd-855656f4

## Summary

### Background

Gateway Welfare Society, a Residents Welfare Association, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s Sand Dune Constructions Private Limited. The Applicant, acting on behalf of the residents of the 'SDC Gateway' housing complex, alleged a default by the Corporate Debtor in the non-payment of a Maintenance Security Deposit amounting to Rs. 3,10,52,200/-. This deposit was collected from flat owners as per Clause 6 of their Flat Buyer's Agreements, at a rate of Rs. 200 per square foot of the super area of each flat. The Corporate Debtor had acknowledged this deposit and had been paying interest at 10% per annum, deducting TDS, which was reflected in the

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## Facts

Gateway Welfare Society, the Applicant and a Residents Welfare Association, filed an application to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s Sand Dune Constructions Private Limited, the Corporate Debtor. The application was 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.

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## Issues and analysis

### Issue 1: Whether the Maintenance Security Deposit collected by the Corporate Debtor from the allottees…

**Ratio:** An amount collected as a security deposit, on which interest is paid by the corporate…

**Reasoning:** The court reasoned that the Corporate Debtor had collected a Maintenance Security Deposit…

**Interpretation:** The court interpreted 'financial debt' under Section 5(8) of the IBC broadly to…

**Application:** In this case, the Corporate Debtor collected a Maintenance Security Deposit and…

## Parties

- **Judges:** Deep Chandr…; RAJEEV ME…
- **Advocates:** For the Applicant:…; For the Respondent…

## Timeline

- **March 18, 1997 — Corporate Debtor…**: M/s Sand Dune Constructions Private Limited was…
- **2015 — Flat Buyer's A…**: Apartment owners of SDC Gateway entered into Flat Buyer's Agreements with the Corporate…

## 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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