# In the matter of SMD Infra Ventures Pvt. Ltd. CP (IB) No. 52-Chd-Pb-2018

> NCLT judgment dated 2018-04-03. Citation: TCN-2018-NCLT-01608. The case involves an application filed by three financial creditors under Section 7 of the…

- **Court:** NCLT
- **Order date:** 3 Apr 2018
- **Citation:** TCN-2018-NCLT-01608
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/smd-infra-ventures-pvt-ltd-cp-ib-no-52-chd-pb-2018-30f8e6d3

## Summary

### Background

The case involves an application filed by three financial creditors under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the corporate insolvency resolution process against SMD Infra Ventures Pvt. Ltd. The petitioners invested in schemes of the respondent, expecting allotment of land within 250 days, which did not occur. The corporate debtor promised to pay the invested money with interest after one year if the plot was not allotted. The petitioners claim default in payment of the maturity amount.

## Facts

Daljit Singh, Sachin Singh, and Jiwan Sharma, the petitioners, invested in schemes offered by SMD Infra Ventures Pvt. Ltd., the respondent. The schemes promised allotment of land within 250 days. If the land was not allotted, the invested money along with interest, termed as 'Projected Value', would be paid after one year. The petitioners invested a total of ₹11,10,000 based on representations and brochures of the respondent. The respondent failed to allot any plot within the stipulated 250 days. After the expiry of one year, the maturity amount (Projected Value) was not paid to the petitioners. The Receipt-cum-Acceptance Letters issued by the respondent to its investors, including the petitioners, served as the investment instrument. The dates of default are given in

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## Issues and analysis

### Issue 1: Whether the petitioners qualify as financial creditors under Section 5(7) and 5(8) of the …

**Ratio:** Section 5(7) of the Code defines 'financial creditor' as a person to whom a financial

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**Reasoning:** The court considered the Receipt-cum-Acceptance Letters, which stated that they were for

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**Interpretation:** The court interpreted Section 5(7) and 5(8) of the Code to include transactions

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**Application:** The court applied the definition of 'financial creditor' and 'financial debt'

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## Parties

- **Judges:** R.P.Nag…; Pradeep R.…
- **Appellants:** Daljit…
- **Respondents:** M/s SMD Infra…

## Timeline

- **2011-08-23 — Incorporation of…**: SMD Infra Ventures Pvt.…
- **2015-10-23 — Issuance of Receipt-cum-…**: Respondent issued Receipt-cum-Accep…

## 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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