# In the matter of Karni Developer and Construction Company Private Limited

> NCLT judgment dated 2024-02-22. Citation: TCN-2024-NCLT-02462. The case involves an application filed by Phoenix ARC Private Limited, the Financial Creditor,…

- **Court:** NCLT
- **Order date:** 22 Feb 2024
- **Citation:** TCN-2024-NCLT-02462
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/karni-developer-and-construction-company-private-limited-6ebdc2d0

## Summary

### Background

The case involves an application filed by Phoenix ARC Private Limited, the Financial Creditor, under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Karni Developers and Construction Company Private Limited, the Corporate Debtor, for defaulting on a payment of Rs. 5,05,89,698. The Corporate Debtor is involved in the construction of buildings. Initially, a Term Loan of Rs. 15 Crores was sanctioned to the Corporate Debtor by Union Bank of India, which was later assigned to the Financial Creditor. Subsequently, the debt was restructured, and a Memorandum of Compromise was entered into for a settlement amount of Rs. 18.10 Crore. The Corporate Debtor sought additional funding, and the Financial

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## Facts

Phoenix ARC Private Limited, the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) to initiate Corporate Insolvency Resolution Process (CIRP) against Karni Developers and Construction Company Private Limited, the Corporate Debtor, due to a default in payment of Rs. 5,05,89,698. Initially, Union Bank of India sanctioned a Term Loan of Rs. 15 Crores to the Corporate Debtor on 2005-12-02. This loan was later assigned to Phoenix ARC Private Limited on 2013-12-03. Subsequently, the debt was restructured, and a Memorandum of Compromise was entered into for a settlement amount of Rs. 18.10 Crore. The Corporate Debtor sought additional funding, and the Financial Creditor granted a new Term Loan of Rs. 3,40,00,000 on

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor under Section 7 of the IBC is maintainable …

**Ratio:** The Hon'ble NCLAT in the case of Mr. Manmohan Singh Jain V/s M/s. State Bank of India

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**Reasoning:** The NCLT relied on the NCLAT's decision, stating that the omission to mention the date of

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**Interpretation:** The interpretation is that the absence of a specific default date in Form-1 is

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**Application:** In this case, the Financial Creditor provided sufficient documentary evidence,

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## Parties

- **Judges:** Deep Chandr…; RAJEEV ME…
- **Respondents:** KARNI DEVELOPERS…
- **Advocates:** Usha S…; Anuroop S…; +1 more

## Timeline

- **2005-12-02 — Term Loan San…**: Union Bank of India sanctioned a Term Loan of…
- **2013-12-03 — Loan Ass…**: Union Bank of India assigned the Term…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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