# In the matter of Nellai Realtors Private Limited CP (IB)-110 (CHE) 2022

> NCLT judgment dated 2023-03-31. Citation: TCN-2023-NCLT-03915. Piramal Capital & Housing Finance Limited filed an application under Section 7 of the…

- **Court:** NCLT
- **Order date:** 31 Mar 2023
- **Citation:** TCN-2023-NCLT-03915
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/nellai-realtors-private-limited-cp-ib-110-che-2022-97054d56

## Summary

### Background

Piramal Capital & Housing Finance Limited filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Nellai Realtors Private Limited, seeking initiation of the Corporate Insolvency Resolution Process (CIRP). The application was based on a financial debt owed by Nellai Realtors to Piramal Capital. The financial creditor claimed a debt of Rs. 75,00,52,572/-. The corporate debtor, along with other co-borrowers, had taken a loan from the financial creditor, secured by mortgages and personal guarantees. The corporate debtor defaulted on the repayment, leading to the application for CIRP.

## Facts

Piramal Capital & Housing Finance Limited (Financial Creditor) filed an application against Nellai Realtors Private Limited (Corporate Debtor) under Section 7 of the Insolvency and Bankruptcy Code, 2016. The Financial Creditor claimed a debt of Rs. 75,00,52,572/-. The Corporate Debtor, along with 19 other associate companies, had requested financial assistance towards a mortgage loan. The Financial Creditor sanctioned a loan of Rs. 20,00,00,000/- jointly to the Corporate Debtor and the Co-Borrowers, secured by joint mortgage of immovable properties. The Corporate Debtor and the Co-Borrowers executed a Loan Agreement and a Demand Promissory Note. The Corporate Debtor defaulted on the repayment, and the account was classified as Non-Performing Asset (NPA) on

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor committed a …

**Ratio:** Section 3(12) of the IBC defines 'default' as non-payment of debt when it becomes due and

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**Reasoning:** The Adjudicating Authority found that the Corporate Debtor had failed to repay the loan

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**Interpretation:** The term 'default' under the IBC is interpreted broadly to include any

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**Application:** In this case, the Corporate Debtor had failed to repay the loan amount, and the

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## Parties

- **Judges:** Ramalingam…; SAMEER…
- **Appellants:** PIRAMAL CAPITAL &…
- **Respondents:** Nellai Realtors…

## Timeline

- **2014-09-26 — Sanction…**: Sanction letter issued by the Financial…
- **2014-09-26 — Loan Agre…**: Common Loan Agreement executed by the…

## 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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