# In the matter of Zeal Developers Pvt. Ltd. IB-237-(ND)-2019

> NCLT judgment dated 2019-05-28. Citation: TCN-2019-NCLT-03170. Smt. Sushila Lakhotia filed an application under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 28 May 2019
- **Citation:** TCN-2019-NCLT-03170
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/zeal-developers-pvt-ltd-ib-237-nd-2019-9cd60e56

## Summary

### Background

Smt. Sushila Lakhotia filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the corporate insolvency resolution process (CIRP) against Zeal Developers Pvt. Ltd. The application was based on an alleged default by Zeal Developers in settling an amount of Rs. 1,36,44,500/-, which included the interest component towards a financial investment made by Lakhotia. The transactions leading to the filing of the application involved an investment agreement where Lakhotia was allotted commercial space in Zeal Developers' project 'Victory Zeal' in Noida. Disputes arose regarding the buyback of a portion of the allotted space and the payment of outstanding amounts.

## Facts

Smt. Sushila Lakhotia, the Applicant, filed an application to initiate corporate insolvency resolution process against Zeal Developers Pvt. Ltd., the Respondent, under Section 7 of the Insolvency and Bankruptcy Code, 2016. The claim was based on an alleged default of Rs. 1,36,44,500/-, including interest, related to a financial investment made by the Applicant. The Applicant, a resident of New Delhi, entered into an investment agreement with the Respondent, a real estate developer, on 01.04.2014. Under the agreement, the Applicant was allotted 2,000 square feet of commercial space in the Respondent's 'Victory Zeal' project in Noida for a consideration of Rs. 75,00,000/-. Subsequently, on 31.03.2015, the Respondent proposed to buy back 1,000 square feet of the allotted

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## Issues and analysis

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

**Ratio:** An application under Section 7 of the IBC is maintainable if there is a debt and a

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**Reasoning:** The Tribunal found that the agreement between the parties was vague and did not clearly

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**Interpretation:** Section 7 of the IBC requires the existence of a financial debt and a default

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**Application:** In this case, the Tribunal found that the Applicant failed to establish the

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## Parties

- **Judges:** Ina Mal…; V.K. SUB…
- **Appellants:** Sushila La…
- **Respondents:** Zeal Developers…

## Timeline

- **2014-04-01 — Investment Ag…**: Applicant entered into an…
- **2015-03-31 — Buyback Pr…**: Respondent proposed to buy back 1,000…

## 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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