# In the matter of Ecstasy Realty Private Limited CP (IB) 922-MB-C-I-2022

> NCLT judgment dated 2023-02-03. Citation: TCN-2023-NCLT-04805. Catalyst Trusteeship Limited filed a petition under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 3 Feb 2023
- **Citation:** TCN-2023-NCLT-04805
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/ecstasy-realty-private-limited-cp-ib-922-mb-c-i-2022-bbd9c397

## Summary

### Background

Catalyst Trusteeship Limited filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Ecstasy Realty Private Limited, seeking to initiate Corporate Insolvency Resolution Process (CIRP). The petition was based on the alleged default in repayment of credit facilities availed by the Corporate Debtor. The Financial Creditor claimed a default of Rs. 1203,55,50,671/-, including principal and interest. The Corporate Debtor contested the application, arguing that there was no default as a moratorium had been granted by the Debenture Holders, and the debt was not due and payable.

## Facts

Catalyst Trusteeship Limited, the Financial Creditor, filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Ecstasy Realty Private Limited, the Corporate Debtor, seeking to initiate Corporate Insolvency Resolution Process (CIRP). The Financial Creditor claimed that the Corporate Debtor had defaulted on credit facilities amounting to Rs. 1203,55,50,671/-, including principal and interest. The Corporate Debtor had availed credit facilities of Rs. 600,00,00,000/- along with interest at 16% p.a. The Corporate Debtor proposed construction of a residential cum retail project. To meet the requirement of funds, the Corporate Debtor proposed to issue Debentures on the basis of private placement. A board Resolution dated 20.03.2018 and Special

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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:** The proceedings under the Insolvency and Bankruptcy Code, 2016, are not recovery

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**Reasoning:** The NCLT reasoned that the entire proceeding appeared to have been initiated with an

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**Interpretation:** The IBC is interpreted as a beneficial legislation aimed at the revival and

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**Application:** The NCLT applied the principle that the IBC is for revival, not recovery, to

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## Parties

- **Judges:** P.N. Des…; Shyam Babu…
- **Appellants:** Catalyst Trusteesh…
- **Respondents:** Ecstasy Realty…

## Timeline

- **1992-01-17 — Incorporation of…**: Ecstasy Realty Private Limited…
- **2018-03-20 — Board and Special…**: Board Resolution and Special Resolution passed authorizing borrowing of funds by issuing…

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