# In the matter of ATS Housing Pvt. Ltd. (IB)-718(ND)2021

> NCLT judgment dated 2022-05-27. Citation: TCN-2022-NCLT-02577. The case involves an application filed by Financial Creditors, Pawan Kumar Gupta and Kiran…

- **Court:** NCLT
- **Order date:** 27 May 2022
- **Citation:** TCN-2022-NCLT-02577
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/ats-housing-pvt-ltd-ib-718nd2021-4e1ac265

## Summary

### Background

The case involves an application filed by Financial Creditors, Pawan Kumar Gupta and Kiran Gupta, under Section 7 of the Insolvency & Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, ATS Housing Pvt. Ltd. The Financial Creditors and the Corporate Debtor entered into a loan agreement on 21.01.2016, where the creditors agreed to loan Rs. 1,00,00,000/- to the debtor for 12 months at 18% interest per annum, paid quarterly. The loan was disbursed through two cheques. The loan agreement was renewed via supplementary agreements, with varying interest rates and tenures. The Corporate Debtor issued two cheques dated 21.07.2021 for Rs. 50,00,000/- each, which were dishonored on 13.10.2021 due to insufficient

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## Facts

On 21.01.2016, Financial Creditors (Pawan Kumar Gupta and Kiran Gupta) and Corporate Debtor (ATS Housing Pvt. Ltd.) entered a loan agreement where the creditors agreed to give a loan of Rs. 1,00,00,000/- to the debtor for 12 months initially, with 18% interest p.a. paid quarterly. The loan was remitted through two cheques, each for Rs. 50,00,000/-, issued by Pawan Kumar Gupta and Kiran Gupta respectively, dated 16.01.2016. The loan was encashed on 22.01.2016. The corporate debtor created a lien on two residential units in the 'ATS Pristine' project as security. The loan agreement was renewed via supplementary agreements dated 21.01.2017, 21.07.2017, 21.07.2018, and 21.07.2019, extending the tenure and modifying the interest rates. After the last supplementary agreement

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditors under Section 7 of the Insolvency & …

**Ratio:** The application is maintainable if it complies with all requirements of the IBC, 2016 and

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**Reasoning:** The NCLT found that the application complied with all requirements of the IBC, 2016 and

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**Interpretation:** Section 7 of the IBC, 2016 allows a financial creditor to initiate CIRP against

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**Application:** The NCLT determined that the application met the requirements of Section 7, as

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## Parties

- **Judges:** BACHU VENKAT…; Virendra Kumar…
- **Appellants:** Pawan Kumar…
- **Respondents:** ATS Housing Pvt.…

## Timeline

- **2016-01-21 — Loan Agre…**: Financial Creditors and Corporate Debtor entered into a loan agreement for Rs.…
- **2016-01-16 — Cheque Is…**: Financial Creditors issued…

## 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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