# In the matter of Rite Developers Private Limited

> NCLT judgment dated 2023-08-25. Citation: TCN-2023-NCLT-01927. Piramal Capital & Housing Finance Limited filed an application under Section 7 of the…

- **Court:** NCLT
- **Order date:** 25 Aug 2023
- **Citation:** TCN-2023-NCLT-01927
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/rite-developers-private-limited-9f23251c

## Summary

### Background

Piramal Capital & Housing Finance Limited filed an application under Section 7 of the Insolvency & Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Rite Developers Private Limited. The financial creditor claimed a default of Rs. 88,32,06,244/-. The corporate debtor had taken a loan of Rs. 60 Crores from the financial creditor (formerly DHFL) for a real estate project. The corporate debtor defaulted on its payment obligations, leading to the application for CIRP.

## Facts

Piramal Capital & Housing Finance Limited (Financial Creditor) filed an application under Section 7 of the Insolvency & Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Rite Developers Private Limited (Corporate Debtor). The Financial Creditor claimed a default of Rs. 88,32,06,244/-. The Corporate Debtor had taken a loan of Rs. 60 Crores from the Financial Creditor (formerly Dewan Housing Finance Corporation Limited - DHFL) for a real estate project under the SRA redevelopment scheme. The loan agreement was executed on 6 June 2018. The Financial Creditor disbursed a total sum of INR 52,25,00,000 in tranches. The Corporate Debtor started defaulting in the payment of its monthly interest instalments from June 2018. A

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## Issues and analysis

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

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

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**Reasoning:** The NCLT considered the submissions of both parties and found that the financial creditor

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

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

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## Parties

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

## Timeline

- **2018-06-01 — Sanction…**: Sanction letter dated 01.06.2018 sanctioning a Term Loan of Rs.60 Crores to the Corporate…
- **2018-06-06 — Loan Agre…**: Loan Agreement executed between the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

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