# 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-02588. 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-02588
- **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-2022-57f66499

## 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 default in payment of interest on debentures issued by the Corporate Debtor. The Applicant seeks to initiate Corporate Insolvency Resolution Process (CIRP) based solely on the defaulted interest amount, without including the principal amount.

## Facts

Aadi Buildwell Private Limited, the Applicant/Financial Creditor, filed a petition under Section 7 of the IBC against Focus Realcon Private Limited, the Respondent/Corporate Debtor, seeking to initiate CIRP. The petition was based on the default in payment of interest on debentures issued by the Corporate Debtor. The debenture certificate, issued on April 13, 2021, had a maturity date of March 31, 2026. The principal amount of the debt extended against the debentures was INR 74,00,00,000. The Applicant claimed a total amount of INR 3,16,88,220 as the interest amount in default, pertaining to three quarters of the financial year 2021-2022. The interest rate on the debentures was 6% per annum, payable quarterly. The Applicant argued that the interest amount alone could

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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,' which includes a

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**Reasoning:** The court reasoned that the prime consideration for initiating CIRP under Section 7 of

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**Interpretation:** The court interpreted Sections 3(11) and 5(8) of the IBC to mean that a

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**Application:** In this case, the principal amount of the debentures was not yet due and

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## Parties

- **Judges:** ABNI RANJAN KUMAR…; L. N. G…
- **Appellants:** Aadi Buildwell…
- **Respondents:** Focus Realcon…
- **Advocates:** Abhishek…; Rishabh Sa…; +3 more

## Timeline

- **2021-04-13 — Debenture Certificate…**: Debenture Certificate issued with…
- **2021-07-01 — Interest Du…**: Interest of INR…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 3(11) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-3)

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