# In the matter of Khusi Building Solutions Pvt. Ltd. COMPANY PETITION IB (IBC) NO. 568 of 2020

> NCLT judgment dated 2023-04-17. Citation: TCN-2023-NCLT-03779. M/s. Financial World India Pvt. Ltd. filed a petition under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 17 Apr 2023
- **Citation:** TCN-2023-NCLT-03779
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/khusi-building-solutions-pvt-ltd-company-petition-ib-ibc-no-568-of-2020-ab5c6eff

## Summary

### Background

M/s. Financial World India Pvt. Ltd. filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against M/s. Khusi Building Solutions Pvt. Ltd. The Financial Creditor claimed that the Corporate Debtor defaulted on a payment of Rs. 1,92,86,418/- as of 09.04.2019. The Financial Creditor, a Non-Banking Financial Company (NBFC), alleged that it had sanctioned a loan of Rs. 7,25,00,000/- to the Corporate Debtor, but the Memorandum of Understanding (MOU) related to the loan was lost. The Corporate Debtor admitted to receiving Rs. 7,25,00,000/- and repaying Rs. 6,23,23,000/-, leaving a balance of Rs. 1,01,77,000/- plus interest unpaid. The Corporate Debtor argued that the Financial Creditor

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## Facts

M/s. Financial World India Pvt. Ltd. (Financial Creditor), a Non-Banking Financial Company, filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s. Khusi Building Solutions Pvt. Ltd. (Corporate Debtor). The Financial Creditor claimed a default of Rs. 1,92,86,418/- as of 09.04.2019, stemming from a loan of Rs. 7,25,00,000/-. The Financial Creditor stated that a Memorandum of Understanding (MOU) related to the loan was lost, and an FIR was filed on 07.01.2019. The Corporate Debtor admitted to receiving Rs. 7,25,00,000/- and repaying Rs. 6,23,23,000/-, leaving Rs. 1,01,77,000/- plus interest unpaid. The Corporate Debtor contended that the Financial Creditor approached them for

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## Issues and analysis

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

**Ratio:** A petition under Section 7 of the IBC is maintainable if there is a debt owed to the

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**Reasoning:** The Adjudicating Authority found that the Financial Creditor failed to provide a loan

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**Interpretation:** Section 7 of the IBC requires the Financial Creditor to demonstrate the

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**Application:** In this case, the absence of a loan agreement and balance confirmation, coupled

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## Parties

- **Judges:** P.S.N. P…; BINOD KUMAR…
- **Appellants:** M/s. Financial…
- **Respondents:** M/s. Khusi…

## Timeline

- **2013-06-18 — Incorporation of…**: M/s. Khusi Building Solutions…
- **2014-10-01 — Expression of…**: Expression of Interest was executed for 80:20 payment plan for purchase of residential…

## 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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