# In the matter of Hoysala Projects Private Limited C.P. (IB) No.27-BB-2022

> NCLT judgment dated 2023-03-28. Citation: TCN-2023-NCLT-04032. DMI Finance Private Limited filed a Company Petition under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 28 Mar 2023
- **Citation:** TCN-2023-NCLT-04032
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/hoysala-projects-private-limited-cp-ib-no27-bb-2022-9dafcf96

## Summary

### Background

DMI Finance Private Limited filed a Company Petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Hoysala Projects Private Limited, alleging default on a loan facility. The Financial Creditor claimed that the Corporate Debtor defaulted on payments amounting to Rs. 2,00,80,418 as of September 15, 2021. The Corporate Debtor opposed the petition, contending that the default was due to a delay in payment for the September 2021 quarter, which had been subsequently paid. The Corporate Debtor also argued that the loan account was standard and not an NPA, and that the petition was not maintainable as there was no existing financial debt or default.

## Facts

DMI Finance Private Limited (Financial Creditor) granted a loan facility to Hoysala Projects Private Limited (Corporate Debtor). The loan agreement was dated 14.05.2019, with disbursement on 24.05.2019. The tenure of the loan was 48 months, with repayment in 12 quarterly installments after a moratorium period. Mr. Sateesh Tirumali Srirangachar and Ms. Hinal Tirumali Sateesh stood as guarantors for the loan. The loan was secured by a first and exclusive charge on the projects and project land, as well as hypothecation over project receivables and moveable assets. The Corporate Debtor was required to deposit project receivables into a designated Escrow Account. The Financial Creditor claimed a default of Rs. 2,00,80,418 as of 15.09.2021. The Corporate Debtor made

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## Issues and analysis

### Issue 1: Whether there was a debt and default on the part of the Corporate Debtor to warrant the initiation …

**Ratio:** The ratio is based on the interpretation of Section 7 of the IBC, 2016, which requires

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**Reasoning:** The Adjudicating Authority reasoned that the Corporate Debtor had made payments towards

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**Interpretation:** The interpretation of Section 7 of the IBC, 2016, requires a clear

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**Application:** In this case, the Adjudicating Authority applied the ratio by considering the

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## Parties

- **Judges:** (Retd.) T.…; Manoj Kumar…
- **Appellants:** DMI Finance…
- **Respondents:** Hoysala Projects…

## Timeline

- **2019-05-14 — Loan Agreeme…**: Date of the loan agreement between DMI Finance Private Limited and Hoysala Projects…
- **2019-05-24 — Loan Disbursem…**: Date of disbursement of the loan to…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 3(12) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-3)

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