# In the matter of Radius Estates and Developers Private Limited I.A No. 2995 of 2021 in CP (IB) No 1390 of 2020

> NCLT judgment dated 2023-01-09. Citation: TCN-2023-NCLT-05150. Beacon Trusteeship Limited, acting as the Debenture Trustee for various Debenture Holders of…

- **Court:** NCLT
- **Order date:** 9 Jan 2023
- **Citation:** TCN-2023-NCLT-05150
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/radius-estates-and-developers-private-limited-ia-no-2995-of-2021-in-cp-ib-no-139-9cc5034f

## Summary

### Background

Beacon Trusteeship Limited, acting as the Debenture Trustee for various Debenture Holders of Radius Estates and Developers Private Limited (Corporate Debtor), filed an application seeking re-classification from a 'Financial Creditor' to a 'Homebuyer/Allottee/Financial Creditor in a Class' in the ongoing Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor. The applicant claimed that due to an error, it had initially filed its claim as a Financial Creditor, whereas it should have been classified as a Homebuyer because the Corporate Debtor had transferred mortgaged premises to the applicant under an English Mortgage.

## Facts

In 2016, Radius Estates and Developers Private Limited (Corporate Debtor) and MIG (Bandra) Realtors and Builders Private Limited jointly undertook a residential project. Beacon Trusteeship Limited, acting as a Debenture Trustee, entered into a Debenture Trust Deed (DTD) with the Corporate Debtor on August 8, 2017, where the Corporate Debtor agreed to issue 250 debentures aggregating to Rs. 25,00,00,000/-. The debentures were secured by an English Mortgage over 8 residential flats and other security documents. The Corporate Debtor failed to comply with its financial obligations under the DTD, leading to dishonored cheques and proceedings under Section 138 of the Negotiable Instruments Act, 1881. The Corporate Debtor was admitted into CIRP on April 30, 2021. Beacon

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## Issues and analysis

### Issue 1: Whether the Applicant which was initially claimed and classified as Financial Creditor can be …

**Ratio:** A creditor cannot change its status at a belated stage of the CIRP, especially after

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**Reasoning:** The Applicant itself lodged its claim as a Financial Creditor and did not raise any

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**Interpretation:** The court interpreted that the applicant's initial actions and conduct as a

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**Application:** The applicant's initial claim as a Financial Creditor, participation in CoC

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## Parties

- **Judges:** Kuldip Kumar…; ANURADHA SANJAY…
- **Appellants:** Beacon Trusteeship…
- **Respondents:** Radius Estates &…; Jayesh Sang…

## Timeline

- **2016-01-01 — Project Unde…**: Corporate Debtor and MIG (Bandra) Realtors and Builders Private Limited jointly undertook…
- **2017-08-08 — Debenture Tru…**: Debenture Trust Deed (DTD) was entered between the Applicant, Corporate Debtor and MIG…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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