# In the matter of Viva Developers Private Limited C.P. No. IB-691(PB-2018

> NCLT judgment dated 2019-06-06. Citation: TCN-2019-NCLT-03042. IFCI Venture Capital Funds Limited, the Financial Creditor, filed a petition under Section 7 of…

- **Court:** NCLT
- **Order date:** 6 Jun 2019
- **Citation:** TCN-2019-NCLT-03042
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/viva-developers-private-limited-cp-no-ib-691pb-2018-ab3611a7

## Summary

### Background

IFCI Venture Capital Funds Limited, the Financial Creditor, filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against VVA Developers Private Limited, the Corporate Debtor. The Corporate Debtor is a company registered under the Companies Act, 1956, incorporated on 19.04.2007. The Financial Creditor claimed that the Corporate Debtor defaulted on a loan of Rs. 22 crores, leading to the account being declared a Non-Performing Asset (NPA) on 30.09.2017. The Financial Creditor issued default notices, and subsequently, the Respondent filed an application (C.A. No. 1205(PB)/2018) after notices under Section 13(2) of the SARFAESI Act. The property was put up for auction, but no bids were

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## Facts

IFCI Venture Capital Funds Limited (Financial Creditor) filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against VVA Developers Private Limited (Corporate Debtor). VVA Developers Private Limited is a company registered under the Companies Act, 1956, incorporated on 19.04.2007. The Financial Creditor granted financial assistance of Rs. 22 crores to the Corporate Debtor, who executed several documents, including a Corporate Loan Agreement, Promissory Note, and Deed of Hypothecation. The Corporate Debtor's account was declared a Non-Performing Asset (NPA) on 30.09.2017 due to repeated defaults. The Financial Creditor issued default notices to the Corporate Debtor. The total amount in

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## Issues and analysis

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

**Ratio:** Under sub-section 5(a) of Section 7 of the Code, the application filed by the petitioner

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**Reasoning:** The court found that a default had occurred, the application was complete, and there were

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

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**Application:** The court applied the provisions of Section 7 to the facts of the case, noting

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## Parties

- **Judges:** M. M. K…; S. K. MOH…
- **Appellants:** IFCI Venture…
- **Respondents:** VVA Developers…
- **Advocates:** Sandeep…; Vishnu La…; +1 more

## Timeline

- **2007-04-19 — Incorporation of…**: VVA Developers Private Limited was…
- **2017-09-30 — Account Decla…**: The account of the Corporate Debtor was declared as Non-Performing Asset (NPA) in the…

## 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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