# In the matter of Sparkspell Homes Pvt. Ltd. Company Petition (IB)No.76-ALD-2019

> NCLT judgment dated 2019-08-28. Citation: TCN-2019-NCLT-01709. The case involves a petition filed by Deepak Gupta HUF, the financial creditor, against M/s…

- **Court:** NCLT
- **Order date:** 28 Aug 2019
- **Citation:** TCN-2019-NCLT-01709
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/sparkspell-homes-pvt-ltd-company-petition-ibno76-ald-2019-2b89bc7f

## Summary

### Background

The case involves a petition filed by Deepak Gupta HUF, the financial creditor, against M/s Sparkspell Homes Pvt. Ltd., the corporate debtor, under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016. The financial creditor sought to initiate the Corporate Insolvency Resolution Process (CIRP) against the corporate debtor, claiming to be a financial creditor under Section 5(7) of the IBC. The financial creditor and corporate debtor entered into two agreements where the financial creditor agreed to pay Rs. 80,00,000 with an interest rate of 4.26% per month. The corporate debtor failed to repay the amount, leading to dishonored cheques and the filing of complaint cases under Section 138 of the Negotiable Instruments Act.

## Facts

Deepak Gupta HUF, acting as the financial creditor, filed a petition against M/s Sparkspell Homes Pvt. Ltd., the corporate debtor, under Section 7 of the IBC, 2016. The financial creditor and corporate debtor entered into two agreements where the financial creditor agreed to pay Rs. 80,00,000 with an interest rate of 4.26% per month. The financial creditor claimed that the corporate debtor defaulted on payments, leading to the dishonor of several cheques. The financial creditor then filed complaint cases under Section 138 of the Negotiable Instruments Act. Despite requests and reminders, the corporate debtor failed to make payments. The financial creditor submitted documents, including bank statements and agreements, to prove the existence of the financial debt. The

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the …

**Ratio:** The application under Section 7 of the IBC can be admitted if it is complete and there is

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**Reasoning:** The court found that the application was complete and that there was a default in the

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**Interpretation:** Section 7 of the IBC allows a financial creditor to initiate the CIRP against a

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**Application:** The court applied this principle to the facts of the case and found that the

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## Parties

- **Judges:** Sh. Abni Ranjan…
- **Appellants:** Deepak Gupt…
- **Respondents:** M/s Sparkspell…

## Timeline

- **2017-02-08 — Reminder by Financial…**: Financial Creditor sent…
- **2017-03-09 — Reminder by Financial…**: Financial Creditor sent…

## 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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