# In the matter of Grand Realcon Private Limited Company Petition No. IB-121-ND-2022

> NCLT judgment dated 2022-05-23. Citation: TCN-2022-NCLT-02665. The case involves a petition filed by Base Realtors Private Limited, the Applicant/Financial…

- **Court:** NCLT
- **Order date:** 23 May 2022
- **Citation:** TCN-2022-NCLT-02665
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/grand-realcon-private-limited-company-petition-no-ib-121-nd-2022-5c5e2f2a

## Summary

### Background

The case involves a petition filed by Base Realtors Private Limited, the Applicant/Financial Creditor, against Grand Realcon Private Limited, the Respondent/Corporate Debtor, under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016. The petition 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. The debenture certificate was issued on 13.04.2021, with a maturity date of 31.03.2026. The interest payments due on 01.07.2021, 01.10.2021, and 01.01.2022 were not paid, leading to the application for default of interest for three quarters of the financial year

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## Facts

Base Realtors Private Limited (Applicant/Financial Creditor) filed a petition against Grand Realcon Private Limited (Respondent/Corporate Debtor) under Section 7 of the IBC, 2016, seeking to initiate CIRP. The claim was based on the default in payment of interest on debentures issued by the Corporate Debtor. The debenture certificate was issued on 13.04.2021, with a maturity date of 31.03.2026. The interest payments due on 01.07.2021, 01.10.2021, and 01.01.2022 were not paid. The Applicant argued that the defaulted interest amount should be considered a financial debt under Section 5(8) of the IBC. The Respondent contended that the principal amount was not yet due, and therefore, the interest alone could not form the basis for initiating CIRP. The debenture certificate

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## Issues and analysis

### Issue 1: Whether a Corporate Insolvency Resolution Process (CIRP) can be initiated solely on the defaulted …

**Ratio:** The initiation of CIRP under Section 7 of the IBC requires the existence of a 'debt' that

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

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**Interpretation:** The court interpreted Sections 3(11) and 5(8) of the IBC to determine whether

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**Application:** The court applied the legal principles to the specific facts of the case,

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## Parties

- **Judges:** ABNI RANJAN KUMAR…; HEMANT KUMAR…
- **Appellants:** BASE REALTORS…
- **Respondents:** GRAND REALCON…

## Timeline

- **2021-04-13 — Debenture Certificate…**: Grand Realcon Private Limited issued a debenture certificate to Base Realtors Private…
- **2021-07-01 — Interest Du…**: Interest payment of INR…

## 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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