# In the matter of Unishire LLP C.P. (IB) No. 172-BB-2019

> NCLT judgment dated 2019-07-31. Citation: TCN-2019-NCLT-02182. M/s. VSL Securities Private Limited filed C.P. (IB) No.172/BB/2019 under Section 7 of the…

- **Court:** NCLT
- **Order date:** 31 Jul 2019
- **Citation:** TCN-2019-NCLT-02182
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/unishire-llp-cp-ib-no-172-bb-2019-61d743ca

## Summary

### Background

M/s. VSL Securities Private Limited filed C.P. (IB) No.172/BB/2019 under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against M/s. Unishire Housing LLP, the Corporate Debtor. The claim is based on a default of Rs.21,58,04,027.39/-, which includes a principal amount of Rs.12,94,00,000/- and interest of Rs.8,64,04,027.39/- calculated at 15% per annum from 03.09.2014 to 15.03.2019. The Financial Creditor and Corporate Debtor entered into a Memorandum of Understanding (MOU) dated 03.09.2014, where the Corporate Debtor was to identify lands for proposed development. The Corporate Debtor failed to identify any lands, leading the Financial Creditor to terminate the MOU.

## Facts

M/s. VSL Securities Private Limited, the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s. Unishire Housing LLP, the Corporate Debtor. The Financial Creditor and Corporate Debtor entered into a Memorandum of Understanding (MOU) dated 03.09.2014, where the Corporate Debtor was to identify lands for proposed development. The Corporate Debtor received Rs. 13,50,00,000/- from the Financial Creditor under the MOU, out of which Rs.56,00,000/- was repaid. The Corporate Debtor failed to identify any lands as per the MOU. The Financial Creditor terminated the MOU and demanded repayment of the outstanding amount. The total outstanding amount claimed was

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the Insolvency and Bankruptcy Code, 2016, for initiating …

**Ratio:** Section 7 of the Insolvency and Bankruptcy Code, 2016, allows a financial creditor to

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**Reasoning:** The Adjudicating Authority considered the application filed by the Financial Creditor

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**Interpretation:** Section 7 provides the mechanism for a financial creditor to trigger the

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**Application:** The Financial Creditor, VSL Securities Private Limited, filed the application

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## Parties

- **Judges:** Rajeswara Rao…; Ashok Kumar…
- **Appellants:** M/s. VSL Securitie…
- **Respondents:** M/s Unishire…

## Timeline

- **2014-09-03 — MOU Exec…**: Financial Creditor and Corporate Debtor entered…
- **2018-12-06 — Legal No…**: Financial Creditor sent a legal notice to the Corporate Debtor terminating the MOU and…

## 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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