# In the matter of Coast Realtors Private Limited (IB)-776(ND)-2021

> NCLT judgment dated 2022-07-14. Citation: TCN-2022-NCLT-01727. L&T Finance Limited, the Financial Creditor, filed a petition under Section 7 of the Insolvency…

- **Court:** NCLT
- **Order date:** 14 Jul 2022
- **Citation:** TCN-2022-NCLT-01727
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/coast-realtors-private-limited-ib-776nd-2021-399abb49

## Summary

### Background

L&T Finance Limited, the Financial Creditor, filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) to initiate the Corporate Insolvency Resolution Process (CIRP) against Coast Realtors Private Limited, the Corporate Debtor. The Financial Creditor claimed that the Corporate Debtor defaulted on a loan agreement. The Corporate Debtor argued that there was no default, the loan transaction was a sham, and the funds were used for purposes other than those stated in the agreement. The Corporate Debtor also claimed coercion by the Financial Creditor.

## Facts

L&T Finance Limited (Financial Creditor) filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Coast Realtors Private Limited (Corporate Debtor). L&T Finance Limited sanctioned a term loan of Rs 1,00,00,00,000 for the construction and development of 'Radiant Tower' at sector 74, Noida, UP. Out of the sanctioned amount, Rs 87,76,60,000 was disbursed to the Corporate Debtor between December 31, 2019, and March 26, 2021. The Corporate Debtor paid interest on the loan from January 15, 2020, to June 15, 2021, but subsequently failed to repay the loan amount. The account of the Corporate Debtor was classified as a Non-Performing Asset (NPA) on October 13, 2021. L&T Finance

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial …

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

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**Reasoning:** The NCLT found that the Financial Creditor had established the existence of a financial

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

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**Application:** The NCLT applied Section 7 of the IBC to the facts of the case, noting that the

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## Parties

- **Judges:** DHARMINDER…; L. N. G…
- **Appellants:** L&T Finance…
- **Respondents:** Coast Realtors…

## Timeline

- **2019-12-31 — Loan Disbur…**: Rs. 40,00,00,000 disbursed…
- **2019-12-31 — Loan Disbur…**: Rs. 21,60,000 disbursed…

## 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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