# In the matter of Brownstone Foundation Private Limited IBA-52-2020

> NCLT judgment dated 2022-04-25. Citation: TCN-2022-NCLT-03098. The case involves an application filed by Jayantilal H. Jain, the Financial Creditor, under…

- **Court:** NCLT
- **Order date:** 25 Apr 2022
- **Citation:** TCN-2022-NCLT-03098
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/brownstone-foundation-private-limited-iba-52-2020-2b79e2c1

## Summary

### Background

The case involves an application filed by Jayantilal H. Jain, the Financial Creditor, under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s. Brownstone Foundation Private Limited, the Corporate Debtor. The Financial Creditor claims a financial debt of Rs. 26,98,633/-. The Corporate Debtor opposed the application, arguing that the application copy did not establish the essentials of a financial debt. The Corporate Debtor also claimed that the Financial Creditor had preferred a suit against M/s Artic Business Group for the same transaction.

## Facts

Jayantilal H. Jain, the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s. Brownstone Foundation Private Limited, the Corporate Debtor. The Financial Creditor claimed a financial debt of Rs. 26,98,633/-, supported by bank statements and pronotes. The Financial Creditor had disbursed Rs. 15,00,000/- on 23.05.2018 and Rs. 16,00,000/- on 19.07.2018 to the Corporate Debtor, evidenced by pronotes. The Corporate Debtor agreed to pay interest at 18% p.a. The Corporate Debtor filed a counter, arguing that the application copy did not establish the essentials of a financial debt and that the Financial Creditor had preferred a suit against M/s Artic Business

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## Issues and analysis

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

**Ratio:** Section 7 of the Insolvency and Bankruptcy Code, 2016, allows a financial creditor to

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**Reasoning:** The Tribunal considered the facts and circumstances of the case, including the documents

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**Interpretation:** Section 7 of the IBC, 2016, provides the mechanism for a financial creditor to

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**Application:** In this case, the Tribunal found that the Financial Creditor had provided

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## Parties

- **Judges:** (Retd.) S.…; Anil Ku…
- **Appellants:** Jayantilal…
- **Respondents:** M/s. Brownstone…

## Timeline

- **2011-09-10 — Incorporation of…**: M/s. Brownstone Foundation…
- **2018-05-23 — Pro Note…**: Pro Note dated…

## 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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