# In the matter of Energy Properties Private Limited

> NCLT judgment dated 2024-03-20. Citation: TCN-2024-NCLT-02011. Avani Towers Private Limited filed a petition under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLT
- **Order date:** 20 Mar 2024
- **Citation:** TCN-2024-NCLT-02011
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/energy-properties-private-limited-6016572b

## Summary

### Background

Avani Towers Private Limited filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Energy Properties Private Limited, seeking to initiate the Corporate Insolvency Resolution Process (CIRP). The petition was based on the Corporate Debtor's alleged default in payment of a sum of Rs. 10,90,72,565, representing the interest portion on a loan advanced by the Financial Creditor. The Financial Creditor and Corporate Debtor entered into a Development Agreement, where the Financial Creditor advanced a loan of Rs. 3.50 Crore, in addition to a security deposit of Rs. 12 Crore. The petition was filed on 30 September 2019, claiming default occurred on 01 October 2010. The Corporate Debtor opposed the petition, arguing that the Financial Creditor had

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## Facts

Avani Towers Private Limited (Financial Creditor) and Energy Properties Private Limited (Corporate Debtor) entered into a Development Agreement. As part of this agreement, the Financial Creditor advanced a loan of Rs. 3.50 Crore to the Corporate Debtor, in addition to a refundable security deposit of Rs. 12 Crore. The loan of Rs. 3.50 Crore carried an interest rate of 18% per annum, compounded quarterly. The Corporate Debtor allegedly defaulted on the interest payments, with the first default occurring on 01 October 2010. The Financial Creditor filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, on 30 September 2019, claiming a total default of Rs. 10,90,72,565, representing the unpaid interest. The Corporate Debtor acknowledged the loan and

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## Issues and analysis

### Issue 1: Whether the Financial Creditor can claim the amount without fulfilling its obligation under the …

**Ratio:** The Hon'ble Supreme Court has had occasion to examine the contours of Section 7

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**Reasoning:** The NCLT relied on the judgment passed by the Hon'ble NCLAT in the matter of State Bank

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**Interpretation:** The interpretation of Section 7 of the IBC, as highlighted by the Supreme

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**Application:** The NCLT applied this principle to the present case, holding that the Financial

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## Parties

- **Judges:** RohitKa…; Balraj…
- **Appellants:** Avani Towers…
- **Respondents:** Energy Properties…

## Timeline

- **2008-06-16 — Development A…**: Avani Towers Private Limited and Energy Properties Private Limited entered into a…
- **2010-10-01 — First De…**: The Corporate Debtor allegedly…

## 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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