# In the matter of Essel Homes Private Limited

> NCLT judgment dated 2024-04-25. Citation: TCN-2024-NCLT-01596. Indiabulls Housing Finance Limited filed a petition under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 25 Apr 2024
- **Citation:** TCN-2024-NCLT-01596
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/essel-homes-private-limited-fdd51cb0

## Summary

### Background

Indiabulls Housing Finance Limited filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Essel Homes Private Limited due to a default of Rs. 2,60,98,26,700. The loan was originally sanctioned to Gnex Realtech Private Limited, with Essel Homes Private Limited acting as a co-borrower and guarantor. The Corporate Debtor raised several defenses, including that the debt was disbursed to Gnex, not Essel Homes, and that the petition was defective. The Adjudicating Authority considered the arguments and evidence presented by both parties.

## Facts

Indiabulls Housing Finance Limited sanctioned a loan of Rs. 190,00,00,000 to Gnex Realtech Private Limited, with Essel Homes Private Limited acting as a co-borrower. The loan agreement was dated 03.06.2020. The entire amount was disbursed on 23.06.2020. Essel Homes Private Limited also pledged 2,16,00,050 equity shares of Gnex Realtech Private Limited as security. Essel Homes Private Limited failed to pay the interest and/or principal payable under the loan agreement, leading to a default. Indiabulls issued a notice dated 20.01.2022 to all borrowers, including Essel Homes. The total default amount was Rs. 2,60,98,26,700 as of January 28, 2022. Essel Homes argued that the debt was disbursed to Gnex, not them, and that the petition was defective. The first date of

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## Issues and analysis

### Issue 1: Whether the petition filed by Indiabulls Housing Finance Limited under Section 7 of the Insolvency …

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

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**Reasoning:** The Adjudicating Authority considered the loan agreement, repayment schedule, and other

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**Interpretation:** Section 7 provides the mechanism for financial creditors to initiate insolvency

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**Application:** In this case, the Adjudicating Authority found that Indiabulls Housing Finance

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## Parties

- **Judges:** Charanjeet Singh…; Smt Lakshmi…
- **Appellants:** Indiabulls…
- **Respondents:** Essel Homes…

## Timeline

- **2020-06-03 — Loan Agreeme…**: The parties entered into a loan…
- **2020-06-23 — Loan Disbur…**: The entire amount of Rs. 190,00,00,000/- was disbursed to M/s Gnex Realtech Private…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(7) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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