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

> NCLT judgment dated 2023-07-11. Citation: TCN-2023-NCLT-02581. Beacon Trusteeship Limited, acting as the Financial Creditor, filed a petition under Section 7…

- **Court:** NCLT
- **Order date:** 11 Jul 2023
- **Citation:** TCN-2023-NCLT-02581
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/nirmal-lifestyle-mulund-private-limited-a46d6070

## Summary

### Background

Beacon Trusteeship Limited, acting as the 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. The Corporate Debtor defaulted on redeeming these debentures.

## 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, claiming a debt of Rs. 7,238,293,534.11. This debt stemmed from debentures issued under two Debenture Trust Deeds (DTD 1 dated 22 March 2018 and DTD 2 dated 28 March 2018) to finance the 'Olympia' project in Mulund, developed by Nirmal Developers, where the Corporate Debtor holds a 99% partnership interest. The Corporate Debtor defaulted on debenture redemption on June 27, 2022, with Rs. 6,61,13,64,079.11 outstanding 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 with a value exceeding the debt and cited a

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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:** Section 7 of the Insolvency and Bankruptcy Code, 2016, allows a financial creditor to

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**Reasoning:** The Tribunal found that the Financial Creditor had established the existence of 'Debt'

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**Interpretation:** Section 7 provides a mechanism for financial creditors to recover their dues

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**Application:** The Tribunal applied Section 7 to the facts of the case, finding that the

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## Parties

- **Judges:** H.V. Subb…; Madhu S…
- **Appellants:** Beacon Trusteeship…
- **Respondents:** Nirmal Lifestyle…

## Timeline

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

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