# In the matter of Sutlej Housing Private Limited C.P. (IB) No. 4682-NCLT-MB-2018

> NCLT judgment dated 2019-09-25. Citation: TCN-2019-NCLT-01268. The case involves an application filed by Mr. Jitendra Kantilal Shah, the Financial Creditor,…

- **Court:** NCLT
- **Order date:** 25 Sept 2019
- **Citation:** TCN-2019-NCLT-01268
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/sutlej-housing-private-limited-cp-ib-no-4682-nclt-mb-2018-bbf748e5

## Summary

### Background

The case involves an application filed by Mr. Jitendra Kantilal Shah, the Financial Creditor, against Sutlej Housing Private Limited, the Corporate Debtor, under Section 7 of the Insolvency & Bankruptcy Code, 2016, for initiating Corporate Insolvency Resolution Process (CIRP). The application stems from a default on a loan provided by the Applicant to the Corporate Debtor as advance consideration for booking flats in a project. The Term Sheet outlined conditions for repayment, including obtaining an IOD within a specific timeframe. Disputes arose regarding the fulfillment of these conditions and the subsequent repayment of the loan with interest.

## Facts

Mr. Jitendra Kantilal Shah (Financial Creditor/Applicant) advanced ₹4,25,00,000 to Sutlej Housing Private Limited (Corporate Debtor/Respondent) as a loan, structured as advance consideration for booking eight flats in the Corporate Debtor's project, "Dadar Gardens." A Term Sheet dated 2017-05-04 stipulated that the amount was repayable if the Corporate Debtor failed to obtain an Intimation of Disapproval (IOD) for the project within 90 days (by 2017-07-22), or if the Applicant chose to take back the advance with 24% interest even if the IOD was obtained. The Corporate Debtor pledged 1,500 shares to secure the loan. The Corporate Debtor issued eight Allotment Letters dated 2017-04-28 and a Post-Dated Cheque (PDC) to ensure repayment. The Corporate Debtor

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor defaulted on …

**Ratio:** Section 5(8) of the I&B Code defines financial debt as a debt along with interest, if

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**Reasoning:** The court found that the advance consideration of ₹4,25,00,000/- granted by the Applicant

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**Interpretation:** The court interpreted Section 5(8) of the I&B Code to include the advance

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**Application:** The court applied the definition of financial debt under Section 5(8) of the

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## Parties

- **Judges:** Mr V.P.…; Mr Rajesh…; +1 more
- **Appellants:** Jitendra Kantilal…
- **Respondents:** Sutlej Housing…

## Timeline

- **2017-04-28 — Allotment Lette…**: Corporate Debtor issued eight Allotment Letters to the Applicant for eight flats…
- **2017-05-04 — Term Sheet E…**: Term Sheet executed between the Applicant and Corporate Debtor, outlining terms of the…

## 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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