# In the matter of Shreepati Build Infra Investment Ltd. CP (IB) 4149-MB-C-II-2018

> NCLT judgment dated 2021-10-29. Citation: TCN-2021-NCLT-00664. Abhigyan Developers Pvt. Ltd. filed a petition under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 29 Oct 2021
- **Citation:** TCN-2021-NCLT-00664
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/shreepati-build-infra-investment-ltd-cp-ib-4149-mb-c-ii-2018-13853f4d

## Summary

### Background

Abhigyan Developers Pvt. Ltd. filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Shreepati Build Infra Investment Ltd. The case originates from an agreement where Abhigyan Developers paid Rs. 3,50,00,000/- to Shreepati Build Infra Investment for the purchase of a flat in "Shreepati Estates." Due to a lack of necessary permissions and approvals, the construction did not commence. Subsequently, the amount was converted into a loan to be repaid with agreed interest. Despite multiple letters from Shreepati Build Infra Investment acknowledging the debt and promising repayment with interest, the amount remained unpaid, leading to the initiation of CIRP.

## Facts

Abhigyan Developers Pvt. Ltd. (Financial Creditor/Applicant) entered into an agreement with Shreepati Build Infra Investment Ltd. (Corporate Debtor/Respondent) for the purchase of a flat in "Shreepati Estates" after paying Rs. 3,50,00,000/-. Due to a lack of necessary permissions, the construction did not commence. The amount was subsequently converted into a loan account by the Corporate Debtor, to be repaid with agreed interest. The payment breakup was as follows: Rs. 1,00,00,000/- on 21.08.2009, Rs. 50,00,000/- on 04.11.2009, Rs. 50,00,000/- on 04.12.2009, and Rs. 1,50,00,000/- on 04.02.2010. An agreement dated 15.02.2011 was made for the purchase of flats No. 4201 and 4202. On 01.04.2012, the Respondent issued a letter confirming the receipt of Rs.

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## Issues and analysis

### Issue 1: Whether the advance payment for a flat, subsequently converted into a loan, constitutes a …

**Ratio:** A 'financial debt' includes a debt along with interest, if any, which is disbursed

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**Reasoning:** The court reasoned that the Corporate Debtor admitted to the debt in various letters and

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**Interpretation:** The interpretation of 'financial debt' under Section 5(8) of the IBC is broad

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**Application:** In this case, the advance payment of Rs. 3,50,00,000/- was made by Abhigyan

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## Parties

- **Judges:** Ashok Kumar…; Shyam Babu…
- **Appellants:** Abhigyan Developer…
- **Respondents:** Shreepati Build…
- **Advocates:** Ashok Kumar…; Shyam Babu…; +4 more

## Timeline

- **2009-08-21 — Payment by Ap…**: Payment of Rs. 1,00,00,000/- (One crore) by Abhigyan Developers to Shreepati Build Infra…
- **2009-11-04 — Payment by Ap…**: Payment of Rs. 50,00,000/- (Fifty Lakhs) by Abhigyan Developers to Shreepati Build Infra…

## 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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