# In the matter of Gstaad Hotels Pvt. Ltd.  CP (IB) No.981-MB-IV-2021

> NCLT judgment dated 2023-03-21. Citation: TCN-2023-NCLT-04114. Firstchoice Properties (India) Private Limited, the Financial Creditor/Applicant, filed a…

- **Court:** NCLT
- **Order date:** 21 Mar 2023
- **Citation:** TCN-2023-NCLT-04114
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/gstaad-hotels-pvt-ltd-cp-ib-no981-mb-iv-2021-99921fb9

## Summary

### Background

Firstchoice Properties (India) Private Limited, the Financial Creditor/Applicant, filed a Company Petition under Section 7 of the Insolvency & Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against Gstaad Hotels Private Limited, the Corporate Debtor. The Financial Creditor claimed a debt of Rs. 12,01,55,199.61/-, including a principal amount of Rs. 2,85,00,000/- and interest, stating that the debt was in default since 19.04.2021. The Corporate Debtor argued that the amount was towards equity contribution and not a loan, and there was no agreement for interest or repayment date. The Corporate Debtor also raised concerns about limitation and the applicant's accounting practices.

## Facts

Firstchoice Properties (India) Private Limited filed a petition under Section 7 of the Insolvency & Bankruptcy Code, 2016, to initiate CIRP against Gstaad Hotels Private Limited, claiming a debt of Rs. 12,01,55,199.61/-. The debt included a principal amount of Rs. 2,85,00,000/- and interest, with the default date being 19.04.2021. The Financial Creditor argued that the amount was a loan, while the Corporate Debtor contended it was an equity contribution. The Corporate Debtor's shares are owned by three groups: Raheja, Ahuja, and Royal. The Corporate Debtor is in hospitality and owns a hotel in Bangalore. The Ahuja Group had agreed to lend monies to the Corporate Debtor at 18% p.a., with a portion treated as capital contribution. The Financial Creditor annexed a

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor under Section 7 of the Insolvency & …

**Ratio:** The proceedings under Section 7 of the IBC are intended to bring the corporate debtor to

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**Reasoning:** The NCLT reasoned that there was a dispute regarding the nature of the transaction, with

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**Interpretation:** Section 7 of the IBC allows a financial creditor to initiate CIRP against a

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**Application:** The NCLT applied the ratio to the facts of the case and concluded that there

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## Parties

- **Judges:** Prabhat…; KISHORE VEMULAPALL…
- **Appellants:** Firstchoice…
- **Respondents:** Gstaad Hotels…

## Timeline

- **2021-10-06 — Filing of Company…**: Firstchoice Properties (India) Private Limited filed a Company Petition seeking…
- **2023-03-21 — Order Pron…**: The NCLT dismissed the application filed by the Financial Creditor to initiate CIRP…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(8) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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