# In the matter of Siddhivinayak Construction Private Limited CP (IB) NO. 3948 OF 2019.

> NCLT judgment dated 2021-02-26. Citation: TCN-2021-NCLT-02902. The case involves an application by Sumedha Fiscal Services Limited, a financial creditor, to…

- **Court:** NCLT
- **Order date:** 26 Feb 2021
- **Citation:** TCN-2021-NCLT-02902
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/siddhivinayak-construction-private-limited-cp-ib-no-3948-of-2019-1b9c9e52

## Summary

### Background

The case involves an application by Sumedha Fiscal Services Limited, a financial creditor, to initiate the Corporate Insolvency Resolution Process (CIRP) against Siddhivinayak Construction Private Limited, the corporate debtor, under Section 7 of the Insolvency and Bankruptcy Code, 2016. Sumedha Fiscal Services Limited disbursed Rs. 62,50,000 to Siddhivinayak Construction Private Limited for flats. The Corporate Debtor failed to hand over possession of flats or refund the amount. A Memorandum of Understanding (MOU) dated 12th June 2014, promised a payment of Rs. 2,33,45,400/- (inclusive of interest). The Corporate Debtor paid only Rs. 16,80,675/-. A letter dated 1st March 2017, admitted that as on 30th June 2016, the Corporate Debtor owed Rs. 2,81,00,000/- with 15%

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## Facts

Sumedha Fiscal Services Limited (Financial Creditor) filed a company petition against Siddhivinayak Construction Private Limited (Corporate Debtor) under Section 7 of the Insolvency and Bankruptcy Code, 2016. The Financial Creditor disbursed Rs. 62,50,000 to the Corporate Debtor for flats. The Corporate Debtor failed to hand over possession of the flats or refund the amount. An MOU dated 12th June 2014, promised a payment of Rs. 2,33,45,400/- (inclusive of interest). The Corporate Debtor paid only Rs. 16,80,675/-. A letter dated 1st March 2017, admitted that as on 30th June 2016, the Corporate Debtor owed Rs. 2,81,00,000/- with 15% interest per annum from 1st July 2016. The company petition was filed on 08.11.2019. The respondent was set ex-parte on 19.12.2019. Section

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## Issues and analysis

### Issue 1: Whether the company petition filed by a single allottee in a real estate project is maintainable in …

**Ratio:** The ratio is based on the amended Section 7 of the Insolvency and Bankruptcy Code, 2016,

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**Reasoning:** The court reasoned that since the petitioner is a single allottee and did not bring the

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**Interpretation:** The interpretation of Section 7, as amended, is that individual allottees in

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**Application:** The ratio and reasoning are applied to the specific facts of the case, where

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## Parties

- **Judges:** H.V. Subb…; Shyam Babu…
- **Appellants:** Sumedha Fiscal…
- **Respondents:** Siddhivinayak…
- **Advocates:** Shyam Ka…

## Timeline

- **2014-06-12 — MOU Date…**: Memorandum of Understanding (MOU) dated 12th June 2014, promised a payment of Rs.…
- **2017-03-01 — Letter D…**: A letter dated 1st March 2017, admitted that as on 30th June 2016, the Corporate Debtor…

## 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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