# In the matter of Rite Builtec Private Limited

> NCLT judgment dated 2023-08-25. Citation: TCN-2023-NCLT-01904. Piramal Capital & Housing Finance Limited, formerly known as Dewan Housing Finance Corporation…

- **Court:** NCLT
- **Order date:** 25 Aug 2023
- **Citation:** TCN-2023-NCLT-01904
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/rite-builtec-private-limited-64821cac

## Summary

### Background

Piramal Capital & Housing Finance Limited, formerly known as Dewan Housing Finance Corporation Limited (DHFL), filed an application under Section 7 of the Insolvency & Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Rite Builtec Private Limited, the Corporate Debtor. DHFL had undergone CIRP and was subsequently acquired by Piramal Capital & Housing Finance Limited. The Corporate Debtor, along with Rite Developers Private Limited (Co-Borrower), had approached DHFL for a credit facility of INR 60 Crores for a real estate project. DHFL disbursed INR 52.25 Crores in tranches. The Corporate Debtor defaulted on interest payments starting June 2018. The Financial Creditor issued a recall notice on August 28, 2020, and a

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## Facts

Piramal Capital & Housing Finance Limited (formerly DHFL) filed an application under Section 7 of the Insolvency & Bankruptcy Code, 2016, to initiate CIRP against Rite Builtec Private Limited. The Corporate Debtor and Rite Developers Private Limited (Co-Borrower) had obtained a credit facility of INR 60 Crores from DHFL for a real estate project. DHFL disbursed INR 52.25 Crores in tranches between June 2018 and January 2019. The Corporate Debtor defaulted on interest payments starting June 2018. DHFL issued a recall notice on August 28, 2020, demanding Rs. 68,82,64,595. A notice under Section 13(2) of the SARFAESI Act was issued on September 24, 2020, demanding Rs. 69,63,47,740. The Corporate Debtor requested further disbursement or allowing a partner to

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the Insolvency & Bankruptcy Code, 2016, is …

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

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**Reasoning:** The NCLT considered the evidence presented by the Financial Creditor, including the loan

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**Interpretation:** Section 7 provides the mechanism for a financial creditor to trigger the

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**Application:** The NCLT found that the Financial Creditor had demonstrated the existence of a

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## Parties

- **Judges:** Prabhat…; KISHORE VEMULAPALL…
- **Appellants:** PIRAMAL CAPITAL &…
- **Respondents:** Rite Builtec…

## Timeline

- **2018-06-01 — Sanction Lett…**: Date of the sanction letter for…
- **2018-06-06 — Loan Agreeme…**: Date of the Loan Agreement between the…

## 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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