# In the matter of Gigeo Construction Company Private Limited

> NCLT judgment dated 2024-06-04. Citation: TCN-2024-NCLT-01248. The case involves an application filed by Piramal Capital and Housing Finance Limited (PCHFL)…

- **Court:** NCLT
- **Order date:** 4 Jun 2024
- **Citation:** TCN-2024-NCLT-01248
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/gigeo-construction-company-private-limited-aea029d6

## Summary

### Background

The case involves an application filed by Piramal Capital and Housing Finance Limited (PCHFL) under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Gigeo Construction Company Private Limited, the Corporate Debtor, for initiating the Corporate Insolvency Resolution Process (CIRP). The debt originated from a term loan of Rs. 50,00,00,000 sanctioned by Dewan Housing Finance Corporation Ltd. (DHFL) to the Corporate Debtor for a real estate project. Various loan agreements and guarantees were executed. DHFL disbursed Rs. 49,20,00,000 between 2017 and 2018. The Corporate Debtor defaulted on payments, leading to the account being classified as a Non-Performing Asset (NPA). PCHFL, after a reverse merger with DHFL, filed the application. Later, the debt was

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## Facts

Dewan Housing Finance Corporation Ltd. (DHFL) sanctioned a term loan of Rs. 50,00,00,000 to Gigeo Construction Company Private Limited (Corporate Debtor) for a real estate project, evidenced by a Sanction Letter dated 26.09.2017. Loan Agreement, Deed of Hypothecation, Deed of Simple Mortgage, and Deed of Personal Guarantee were executed on 27.09.2017 and 29.09.2017. DHFL disbursed Rs. 49,20,00,000 between 29.09.2017 and 29.06.2018. The Corporate Debtor failed to adhere to the loan agreement terms and defaulted on 15.04.2018, resulting in the account being classified as NPA on 14.07.2018. A Loan Recall Notice was issued on 11.11.2019, but the Corporate Debtor failed to make the required payment. PCHFL, after reverse-merging with DHFL, filed an application on 08.09.2022.

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## Issues and analysis

### Issue 1: Whether the present proceedings are liable to be held in abeyance due to pending application CP …

**Ratio:** Section 128 of the Indian Contract Act, 1872, provides that the liability of the surety

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**Reasoning:** The Adjudicating Authority reasoned that the Corporate Debtor's plea that the application

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**Interpretation:** The interpretation of Section 128 of the Indian Contract Act, 1872, and

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**Application:** The Adjudicating Authority applied the ratio to the facts of the case, stating

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## Parties

- **Judges:** K. R. SAJI…; SANJIV…
- **Appellants:** Omkara Assets…
- **Respondents:** Gigeo Construction…
- **Advocates:** Nausher…; Astha…; +3 more

## Timeline

- **2017-09-26 — Sanction…**: Dewan Housing Finance Corporation Ltd. (DHFL) sanctioned a term loan of Rs. 50,00,00,000…
- **2017-09-27 — Loan Agre…**: Loan Agreement, Deed of Hypothecation, Deed of Simple Mortgage, and Deed of Personal…

## 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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