# In the matter of Rajesh Real Estate Developers Pvt. Ltd.

> NCLT judgment dated 2024-02-27. Citation: TCN-2024-NCLT-02375. Creative Plastics Ltd. filed a company petition seeking initiation of Corporate Insolvency…

- **Court:** NCLT
- **Order date:** 27 Feb 2024
- **Citation:** TCN-2024-NCLT-02375
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/rajesh-real-estate-developers-pvt-ltd-151b38fb

## Summary

### Background

Creative Plastics Ltd. filed a company petition seeking initiation of Corporate Insolvency Resolution Process (CIRP) against Rajesh Real Estate Developers Pvt. Ltd. under Section 7 of the Insolvency and Bankruptcy Code, 2016, alleging default in payment. The Financial Creditor claimed that the Corporate Debtor failed to make payment of Rs. 3,43,38,953/-. The Corporate Debtor acknowledged a debt of Rs. 6,81,18,750/- as of 31.03.2019 and issued letters assuring repayment of principal and interest. Cheques issued were dishonored. A previous company petition was filed, and consent terms were entered into, but the Corporate Debtor defaulted again. The Financial Creditor cancelled the consent terms and filed the present petition.

## Facts

Creative Plastics Ltd. (Financial Creditor) filed a petition against Rajesh Real Estate Developers Pvt. Ltd. (Corporate Debtor) under Section 7 of the Insolvency and Bankruptcy Code, 2016, claiming a default of Rs. 3,43,38,953/-. The Corporate Debtor had earlier acknowledged a debt of Rs. 6,81,18,750/- as of 31.03.2019. The Corporate Debtor issued letters assuring repayment of principal and interest on loans amounting to Rs. 1,00,00,000/- each, with interest at 15% p.a., supported by demand promissory notes and post-dated cheques (PDCs). The issued cheques were dishonored. A previous company petition (CP No. 179/MB/2020) was filed, and the parties entered into consent terms on 03.09.2021, where the Corporate Debtor agreed to pay Rs. 8,87,75,000/-. The Corporate Debtor

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## Issues and analysis

### Issue 1: Whether the non-payment of outstanding dues as per the consent terms constitutes a 'financial debt' …

**Ratio:** The court held that the non-payment of outstanding dues as per the consent terms does

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**Reasoning:** The court reasoned that the Corporate Debtor had undisputedly breached the consent terms.

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**Interpretation:** The court interpreted that when a financial debt exists, and consent terms are

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**Application:** The court applied the ratio to the facts by noting that the original debt was a

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## Parties

- **Judges:** Kuldip Kumar…; ANIL RAJ C…
- **Appellants:** Creative Plastics…
- **Respondents:** Rajesh Real…

## Timeline

- **2015-01-01 — Loan Advan…**: Financial Creditor advanced a loan of Rs. 9 crores to the Corporate Debtor in three…
- **2015-12-01 — Partial Rep…**: Rs. 3 crores was repaid between…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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