# In the matter of Nirmal Lifestyle (Mulund) Private Limited

> NCLT judgment dated 2023-07-11. Citation: TCN-2023-NCLT-02568. Beacon Trusteeship Limited, acting as a Financial Creditor, filed a petition under Section 7 of…

- **Court:** NCLT
- **Order date:** 11 Jul 2023
- **Citation:** TCN-2023-NCLT-02568
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/nirmal-lifestyle-mulund-private-limited-8efc0814

## Summary

### Background

Beacon Trusteeship Limited, acting as a Financial Creditor, filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Nirmal Lifestyle (Mulund) Private Limited, the Corporate Debtor, due to an unresolved financial debt of Rs. 7,238,293,534.11. The debt arose from debentures issued under two Debenture Trust Deeds dated March 22, 2018, and March 28, 2018, to raise funds for the 'Olympia' project in Mulund. The Corporate Debtor defaulted in redeeming the debentures on June 27, 2022.

## Facts

Beacon Trusteeship Limited, the Financial Creditor, filed a petition to initiate CIRP against Nirmal Lifestyle (Mulund) Private Limited, the Corporate Debtor, under Section 7 of the IBC. The claim was based on a financial debt of Rs. 7,238,293,534.11 arising from debentures issued under two Debenture Trust Deeds dated March 22, 2018, and March 28, 2018. The debentures were issued to raise funds for the 'Olympia' project in Mulund, developed by M/s Nirmal Developers, where the Corporate Debtor is a majority partner. The Corporate Debtor defaulted on redeeming the debentures on June 27, 2022, with amounts aggregating to Rs. 6,61,13,64,079.11 under DTD 1 and Rs. 62,69,29,455.00 under DTD 2. The Corporate Debtor argued that the debt was secured by mortgaged properties, and

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## Issues and analysis

### Issue 1: Whether the petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 is maintainable …

**Ratio:** The Hon'ble Supreme Court has held that the Adjudicating Authority has the discretion to

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**Reasoning:** The Tribunal considered the Corporate Debtor's argument that the Financial Creditor was

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**Interpretation:** The existence of security does not automatically preclude the initiation of

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**Application:** Despite the Corporate Debtor's claim of adequate security, the Tribunal found

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## Parties

- **Judges:** H.V. Subb…; Madhu S…
- **Appellants:** Beacon Trusteeship…
- **Respondents:** Nirmal Lifestyle…
- **Advocates:** Nirav…; Saloni…; +3 more

## Timeline

- **2018-03-22 — Debenture Trus…**: Execution of Debenture Trust…
- **2018-03-28 — Debenture Trus…**: Execution of Debenture Trust…

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