# In the matter of Bhandari Infrastructure and Construction Private Limited CP (IB) No.4016-MB-IV-2019

> NCLT judgment dated 2023-01-27. Citation: TCN-2023-NCLT-04873. Birla Projects Private Limited, the Financial Creditor/Applicant, filed an application under…

- **Court:** NCLT
- **Order date:** 27 Jan 2023
- **Citation:** TCN-2023-NCLT-04873
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/bhandari-infrastructure-and-construction-private-limited-cp-ib-no4016-mb-iv-2019-abd11da2

## Summary

### Background

Birla Projects Private Limited, the Financial Creditor/Applicant, filed an application under Section 7 of the Insolvency & Bankruptcy Code, 2016 (I&B Code) seeking initiation of Corporate Insolvency Resolution Process (CIRP) against Bhandari Infrastructure and Construction Development Private Limited, the Corporate Debtor. The application was filed claiming a total default of Rs.1,95,36,004/- up to 31.10.2019, with the date of default stated as 31.03.2017. The Corporate Debtor contested the petition, arguing that the amount in question was an investment in real estate projects, not a loan, and that a land transfer agreement was in place to satisfy the claim.

## Facts

Birla Projects Private Limited (Financial Creditor) filed an application under Section 7 of the I&B Code to initiate CIRP against Bhandari Infrastructure and Construction Development Private Limited (Corporate Debtor). The application claimed a default of Rs.1,95,36,004/- as of 31.10.2019, with the default date being 31.03.2017. The Financial Creditor disbursed a loan of Rs.1,30,00,000/- to the Corporate Debtor on 19.03.2016 at 15% interest. The Corporate Debtor made some interest payments with TDS deductions. The Financial Creditor submitted ledgers and balance confirmations. The Corporate Debtor argued the amount was an investment, not a loan, and presented an undated Sale Deed for land transfer in satisfaction of the claim. The court noted the Corporate Debtor

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor is admissible under Section 7 of the …

**Ratio:** A petition under Section 7 of the I&B Code requires proof of default. Default occurs

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**Reasoning:** The court found that while the existence of the debt was not in dispute, the Financial

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**Interpretation:** Section 7 of the I&B Code requires the establishment of a 'default' as a

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**Application:** In this case, since the Financial Creditor did not provide sufficient evidence

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## Parties

- **Judges:** Prabhat…; KISHORE VEMULAPALL…
- **Appellants:** Birla Projects…
- **Respondents:** Bhandari Infrastru…
- **Advocates:** Rohann…; Prasad Sar…; +2 more

## Timeline

- **2016-03-19 — Loan Disbur…**: Financial Creditor disbursed a loan of…
- **2017-03-31 — Date of D…**: Stated date of default by…

## 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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