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

> NCLT judgment dated 2023-03-31. Citation: TCN-2023-NCLT-03904. Piramal Capital & Housing Finance Limited filed an application under Section 7 of the…

- **Court:** NCLT
- **Order date:** 31 Mar 2023
- **Citation:** TCN-2023-NCLT-03904
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/nellai-realtors-private-limited-cp-ib-110-che-2022-ab93040e

## 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 financial creditor claimed a debt of Rs. 75,00,52,572/-. The corporate debtor, along with other co-borrowers, had requested financial assistance towards a mortgage loan, which led to a sanction letter dated 26.09.2014 for Rs. 20,00,00,000/-. The corporate debtor and co-borrowers jointly executed a loan agreement and deposited title deeds to create an equitable mortgage. The account was classified as Non-Performing Asset (NPA) on 30.06.2015. Despite part payments and acknowledgements of debt, the outstanding dues remained unpaid.

## Facts

Piramal Capital & Housing Finance Limited (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Nellai Realtors Private Limited (Corporate Debtor). 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 on 26.09.2014. The Corporate Debtor and the Co-Borrowers jointly executed a Loan Agreement and deposited title deeds to create an equitable mortgage. The date of default was averred as 09.08.2017. The account was classified as Non-Performing Asset (NPA) on 30.06.2015.

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## Issues and analysis

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

**Ratio:** The scheme of the Code is to ensure that when a default takes place, in the sense that a

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**Reasoning:** The Tribunal relied on the judgment of the Hon'ble Supreme Court in Innoventive

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**Interpretation:** The term 'default' under Section 3(12) of the IBC is interpreted broadly to

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**Application:** The Corporate Debtor committed default in repayment of the 'financial debt',

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## Parties

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

## Timeline

- **2014-09-26 — Sanction…**: Financial Creditor sanctioned a loan of Rs. 20,00,00,000/- to the Corporate Debtor and…
- **2014-09-26 — Loan Agre…**: Corporate Debtor and Co-Borrowers…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 3(12) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-3)

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