# In the matter of Kavya Build-con Private Limited CP (IB) 2832-MB-2019

> NCLT judgment dated 2022-06-27. Citation: TCN-2022-NCLT-02029. The case involves a petition filed under Section 7 of the Insolvency and Bankruptcy Code, 2016…

- **Court:** NCLT
- **Order date:** 27 Jun 2022
- **Citation:** TCN-2022-NCLT-02029
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/kavya-build-con-private-limited-cp-ib-2832-mb-2019-9455ad85

## Summary

### Background

The case involves a petition filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) by Parul A Vora, the Financial Creditor, against Kavya Buildcon Private Limited, the Corporate Debtor, seeking to initiate the Corporate Insolvency Resolution Process (CIRP). The Financial Creditor claimed that the Corporate Debtor defaulted on a financial debt. The Corporate Debtor contested the claim, arguing that the debt was owed by a partnership firm, Kavya Construction Co., in which the Corporate Debtor was a partner, and not directly by the Corporate Debtor itself. The Corporate Debtor also argued that the petition was not maintainable under Section 7 of the IBC.

## Facts

Parul A Vora, the Financial Creditor, filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) to initiate Corporate Insolvency Resolution Process (CIRP) against Kavya Buildcon Private Limited, the Corporate Debtor. The Financial Creditor claimed that the Corporate Debtor defaulted on a financial debt. The Financial Creditor disbursed Rs. 5,25,000 to M/s Kavya Construction Co., a partnership firm, on 2009-10-12. The Corporate Debtor is a partner in Kavya Construction Co. The Financial Creditor submitted bank statements and confirmation of accounts to support the claim. The total outstanding amount due as of 2019-03-31 was Rs. 9,72,876, including interest calculated at 12% per annum. The Corporate Debtor argued that the debt was owed by the

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## Issues and analysis

### Issue 1: Whether the claim of the Financial Creditor falls under the definition of financial debt under …

**Ratio:** The definition of 'corporate debtor' under Section 3(8) of the Code specifies that a

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**Reasoning:** The NCLT reasoned that the debt was owed by the partnership firm, Kavya Construction Co.,

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**Interpretation:** The interpretation of Section 3(8) is that the Corporate Debtor must directly

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**Application:** In this case, the NCLT applied the definition of 'corporate debtor' to the

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## Parties

- **Judges:** P.N. Des…; K.K. V…
- **Appellants:** Parul A…
- **Respondents:** Kavya Buildcon…

## Timeline

- **2004-03-29 — Incorporation of…**: Kavya Buildcon Private Limited…
- **2009-10-12 — Disbursal o…**: Financial Creditor disbursed Rs.…

## 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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