# In the matter of Focus Realcon Private Limited Company Petition No. IB-124-ND-2022

> NCLT judgment dated 2022-05-26. Citation: TCN-2022-NCLT-02586. The case involves an application under Section 7 of the Insolvency and Bankruptcy Code (IBC),…

- **Court:** NCLT
- **Order date:** 26 May 2022
- **Citation:** TCN-2022-NCLT-02586
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/focus-realcon-private-limited-company-petition-no-ib-124-nd-2022-0af6fa94

## Summary

### Background

The case involves an application under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, filed by Aadi Buildwell Private Limited (Applicant/Financial Creditor) against Focus Realcon Private Limited (Respondent/Corporate Debtor). The application pertains to the initiation of Corporate Insolvency Resolution Process (CIRP) based on the defaulted interest amount on debentures issued by the Corporate Debtor. The applicant claims that the corporate debtor defaulted on interest and security premium payments due on 01.07.2021, 01.10.2021, and 01.01.2022.

## Facts

Aadi Buildwell Private Limited filed an application under Section 7 of the IBC against Focus Realcon Private Limited, seeking to initiate CIRP based on the default in payment of interest on debentures. The debentures were issued by Focus Realcon Private Limited to Aadi Buildwell Private Limited. The applicant claimed that the corporate debtor defaulted on interest and security premium payments due on 01.07.2021, 01.10.2021, and 01.01.2022. The total interest amount claimed to be in default was INR 3,16,88,220. The debenture certificate, issued on 13.04.2021, stipulated a coupon rate of 6% per annum payable on face value plus securities premium on quarterly rests. The maturity date of the debentures was 31.03.2026, but the debentures could be redeemed at any time at the

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## Issues and analysis

### Issue 1: Whether CIRP can be initiated solely on the defaulted amount of interest without including the …

**Ratio:** CIRP under Section 7 of the IBC requires the existence of a 'debt' as defined under the

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**Reasoning:** The court reasoned that the principal amount was not yet due and payable, and therefore,

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**Interpretation:** The interpretation of 'debt' and 'financial debt' under Sections 3(11) and 5(8)

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**Application:** In this case, the applicant sought to initiate CIRP based solely on the

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## Parties

- **Judges:** Sh. Abni Ranjan…; SH. L. N.…
- **Appellants:** Aadi Buildwell…
- **Respondents:** Focus Realcon…
- **Advocates:** Abhishek…; Rishabh Sa…; +3 more

## Timeline

- **2011-03-31 — Debenture I…**: Debentures worth INR 74,00,00,000 were issued by Focus Realcon Private Limited to Aadi…
- **2021-04-13 — Debenture Certificate…**: Debenture Certificate issued with a…

## 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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