# In the matter of PARORCH DEVELOPERS LLP

> NCLT judgment dated 2025-05-08. Citation: TCN-2025-NCLT-00098. Athena Constructions Limited, the Financial Creditor, filed an application under Section 7 of…

- **Court:** NCLT
- **Order date:** 8 May 2025
- **Citation:** TCN-2025-NCLT-00098
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/parorch-developers-llp-fe6ad232

## Summary

### Background

Athena Constructions Limited, the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process (CIRP) against Parorch Developers LLP, the Corporate Debtor. The Financial Creditor claimed a default of Rs. 17,87,42,416/- in respect of an Inter Corporate Loan advanced to the Corporate Debtor between March 2022 and October 2022. The Corporate Debtor had requested financial assistance due to financial constraints in proceeding with a Slum Rehabilitation Authority (SRA) project. The Financial Creditor agreed to provide short-term financial assistance in the form of an Inter-Corporate Loan amounting to Rs. 12,00,00,000/- at an interest rate of 24% per annum for a tenure of

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## Facts

Athena Constructions Limited (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Parorch Developers LLP (Corporate Debtor). The claim was based on a default of Rs. 17,87,42,416/- related to an Inter-Corporate Loan. The Corporate Debtor, facing financial constraints with its Slum Rehabilitation Authority (SRA) project named "Trinity Tower", sought financial assistance from the Financial Creditor. An Inter-Corporate Loan of Rs. 12,00,00,000/- was agreed upon at a 24% annual interest rate for six months. The Financial Creditor disbursed Rs. 11,53,00,000/- between March 2022 and October 2022. The Corporate Debtor defaulted on repayment after six

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## Issues and analysis

### Issue 1: Whether the absence of a written agreement precludes the establishment of a financial debt under …

**Ratio:** A formal written contract is not a precondition for proving the existence of a financial

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**Reasoning:** The Tribunal relied on the Hon'ble NCLAT's decisions in Prayag Polytech Pvt. Ltd. vs. Gem

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**Interpretation:** Section 5(8) of the Code defines 'financial debt' as a debt along with

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**Application:** In this case, despite the absence of a formal inter-corporate loan agreement,

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## Parties

- **Judges:** ASHISH…; SANJIV…
- **Appellants:** Athena Constructio…
- **Respondents:** Parorch Developers…; M/S PARORCH…

## Timeline

- **2022-01-01 — Corporate Debtor Seeks…**: Mr. Girish Amonker, Director of M/s Amonker Trading Private Limited (a partner of the…
- **2022-03-01 — Disbursement of…**: The Financial Creditor disbursed the Inter Corporate Loan to the tune of Rs.…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(8) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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