# In the matter of Ideal Real Estates Private Limited

> NCLT judgment dated 2024-04-05. Citation: TCN-2024-NCLT-01820. Oarsman Credit Private Limited filed a petition under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 5 Apr 2024
- **Citation:** TCN-2024-NCLT-01820
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/ideal-real-estates-private-limited-9efa065e

## Summary

### Background

Oarsman Credit Private Limited filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Ideal Real Estates Private Limited, seeking to initiate the Corporate Insolvency Resolution Process (CIRP). This petition was registered as CP (IB) No. 127/KB/2023. Ideal Real Estates Private Limited also filed I.A. (IB) No. 1920/KB/2023 seeking a stay of proceedings in the CP. The financial creditor and corporate debtor had previously entered into settlement agreements, but defaults occurred. The financial creditor argued that despite the settlements, the underlying financial debt remained valid and CIRP could be initiated. The corporate debtor contended that the breach of settlement terms did not constitute a financial debt and that a fresh petition

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## Facts

Oarsman Credit Private Limited (Financial Creditor) filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Ideal Real Estates Private Limited (Corporate Debtor). The petition was registered as CP (IB) No. 127/KB/2023. The Corporate Debtor was incorporated on 07 October 1988. The Financial Creditor had disbursed Rs. 5,00,00,000/- to the Corporate Debtor between 04 May 2013 and 20 May 2013, with interest. The Corporate Debtor made a partial repayment of Rs. 1,00,00,000/-. The parties entered into a settlement agreement on 21 November 2020, leading to the withdrawal of an earlier petition (CP (IB) No. 1621/KB/2018). The Corporate Debtor failed to make payments as per the settlement,

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## Issues and analysis

### Issue 1: Whether the claim of the Financial Creditor constitutes a financial debt under the Insolvency and …

**Ratio:** A financial debt is defined under Section 5(8) of the IBC as a debt along with interest,

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**Reasoning:** The court reasoned that the initial disbursement of funds by the Financial Creditor to

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**Interpretation:** The court interpreted the definition of financial debt broadly to include debts

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**Application:** The court applied the ratio to the facts by noting that the initial

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## Parties

- **Judges:** Rohit K…; Balraj…; +1 more
- **Appellants:** Oarsman Credit…
- **Respondents:** Ideal Real…

## Timeline

- **1988-10-07 — Incorporation of…**: Ideal Real Estates Private…
- **2013-05-04 — Disbursement…**: Financial Creditor disbursed Rs. 5,00,00,000/- to the Corporate Debtor between 04 May…

## 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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