# In the matter of Southern Investments Pvt. Ltd. IA-487-IB-2018 in CP-202-(CB)-2018

> NCLT judgment dated 2018-10-24. Citation: TCN-2018-NCLT-00508. The case involves an application under Section 60 of the Insolvency and Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 24 Oct 2018
- **Citation:** TCN-2018-NCLT-00508
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/southern-investments-pvt-ltd-ia-487-ib-2018-in-cp-202-cb-2018-a269d8f5

## Summary

### Background

The case involves an application under Section 60 of the Insolvency and Bankruptcy Code, 2016, concerning M/s. Southern Investments Private Limited. The Corporate Insolvency Resolution Process (CIRP) was initiated based on an application filed by the Operational Creditor under Section 9 of the Insolvency and Bankruptcy Code, 2016, read with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, vide order dated 26.03.2018. Ms. Chitra Srinivas was appointed as the Interim Resolution Professional (IRP). The IRP took charge of the Corporate Debtor's affairs, including cash and bank accounts, and observed that the company had ceased operations since June 2017. The IRP received claims from creditors and formed a Committee of Creditors

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## Facts

M/s. Southern Investments Private Limited faced Corporate Insolvency Resolution Process (CIRP) initiated under Section 9 of the Insolvency and Bankruptcy Code, 2016. Ms. Chitra Srinivas was appointed as the Interim Resolution Professional (IRP) and later as the Resolution Professional (RP). The company had ceased operations since June 2017, with negligible construction activity. The RP identified 42 housing projects at various stages of completion, funded by investments from hundreds of homebuyers. Construction had stopped due to non-payment of dues. All employees resigned, with only 3 former employees assisting in accessing records. The company's financial history showed losses in 2016 and 2017. The business model involved agreements with landowners for construction,

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## Issues and analysis

### Issue 1: Whether the Resolution Professional can hand over the incomplete projects to the Home Buyers …

**Ratio:** The legal principle applied is based on the Tribunal's power to facilitate the resolution

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**Reasoning:** The Tribunal reasoned that the homebuyers are the owners of the undivided share of the

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**Interpretation:** This issue involves the interpretation of the powers of the Adjudicating

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**Application:** The Tribunal applied this principle to the specific facts of the case, noting

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## Parties

- **Judges:** Ch. Mohd Sharief…
- **Appellants:** Chitra Sr…
- **Respondents:** Southern Investmen…

## Timeline

- **2018-03-26 — CIRP Init…**: Corporate Insolvency Resolution Process…
- **2017-06-01 — Company Operations…**: Company had completely stopped…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60 — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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