# In the matter of Vatsin Infrastructure LImited CP (IB) No. 366-Chd-Hry-2018

> NCLT judgment dated 2019-12-13. Citation: TCN-2019-NCLT-00179. The case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 13 Dec 2019
- **Citation:** TCN-2019-NCLT-00179
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/vatsin-infrastructure-limited-cp-ib-no-366-chd-hry-2018-254dcb18

## Summary

### Background

The case involves an application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, by multiple applicants (financial creditors) against Vatsin Infrastructure Limited (corporate debtor) for initiation of the Corporate Insolvency Resolution Process (CIRP). The applicants claimed that the corporate debtor defaulted on repayment of investments made by them in the corporate debtor's project, 'Avenue 72' in Bhiwadi, Rajasthan. The applicants had invested a total of ₹90,00,000/- based on a Memorandum of Understanding (MoU) executed in December 2014, with a promise of assured profits/interests. The corporate debtor issued post-dated cheques which were later dishonored. The corporate debtor contended that the applicants do not fall under the category of

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## Facts

1. Multiple applicants (Jatinder Verma, Shehzad Ali Azad, Saket Agarwal, Lokesh Gupta, Sonia Khosla, and Ekta Nigam) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Vatsin Infrastructure Limited.
2. The applicants invested a total of ₹90,00,000/- in the corporate debtor's project, 'Avenue 72' in Bhiwadi, Rajasthan, based on a Memorandum of Understanding (MoU) executed in December 2014.
3. Each applicant invested ₹15,00,000/- as per the terms of the MoU, with a promise of assured profits/interests amounting to ₹4,50,000/- per applicant.
4. The corporate debtor agreed to repay the invested amount along with assured profits/interests within a year from the date of execution of the MoU.
5. The corporate debtor issued post-dated cheques

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## Issues and analysis

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

**Ratio:** A financial creditor is defined as any person to whom a financial debt is owed, and a

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**Reasoning:** The court examined Clause 2 of the MoU, which stated that the applicants were willing to

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**Interpretation:** The court interpreted the definition of 'financial creditor' and 'financial

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**Application:** The court applied the definition of 'financial creditor' to the facts of the

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## Parties

- **Judges:** Ajay Kumar…; Pradeep R.…
- **Appellants:** Jatinder…
- **Respondents:** Vatsin Infrastruct…

## Timeline

- **2014-12-01 — Execution of Memorandum…**: A Memorandum of Understanding (MoU) was executed by all the applicants in the month of…
- **2015-12-10 — Date of D…**: The date on which default…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(7) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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