# In the matter of Ruby Buildestates Private Limited

> NCLT judgment dated 2024-05-17. Citation: TCN-2024-NCLT-01299. Rajasthan Financial Corporation filed an application under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 17 May 2024
- **Citation:** TCN-2024-NCLT-01299
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/ruby-buildestates-private-limited-722cb415

## Summary

### Background

Rajasthan Financial Corporation filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against M/S Ruby Buildestates Private Limited, the Corporate Debtor, due to a default in payment of Rs. 20,06,36,348/-. The Financial Creditor had sanctioned loans to the Corporate Debtor in 2008 and 2009. The Corporate Debtor defaulted on repayment, leading the Financial Creditor to issue a legal notice in 2010 and take possession of the mortgaged property. Subsequent auction attempts were stayed by the Rajasthan High Court due to writ petitions filed by flat purchasers. The Applicant filed applications seeking vacation of the stay order. The Corporate Debtor submitted settlement

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## Facts

Rajasthan Financial Corporation (RFC) sanctioned a loan of Rs. 1,25,00,000/- to M/S Ruby Buildestates Private Limited in 2008. In 2009, RFC sanctioned another loan of Rs. 2,40,00,000/- to the Corporate Debtor. The loan agreement was executed on 06.07.2009, against land measuring 5730.52 sq. mtrs. The loan was disbursed on 17.07.2009. The Corporate Debtor defaulted on repayment of the second loan. On 13.01.2010, RFC issued a legal notice demanding payment of Rs. 18,67,110/-. On 23.02.2010, RFC took possession of the mortgaged property. RFC proposed to auction the mortgaged property on 16.06.2010. The Rajasthan High Court granted an ex-parte stay order against the auction. The Applicant filed an application seeking vacation of the stay order. The High Court modified the

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## Issues and analysis

### Issue 1: Whether the delay beyond three years in filing an application under Section 7 of the Code can be …

**Ratio:** Section 5 of the Limitation Act, 1963, allows the court to condone the delay in filing an

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**Reasoning:** The court considered the sequence of events, including the non-payment of loan

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**Interpretation:** The court interpreted Section 5 of the Limitation Act, 1963, to allow for the

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**Application:** The court applied the ratio to the facts of the case, noting that the Applicant

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## Parties

- **Judges:** Deep Chandr…; RAJEEV ME…
- **Appellants:** Rajasthan…
- **Respondents:** M/S RUBY BUILDESTA…
- **Advocates:** Manjeet…; Naresh Kumar…

## Timeline

- **2008-01-01 — Loan Sanc…**: Rajasthan Financial Corporation sanctioned the first loan of Rs. 1,25,00,000/- to M/S…
- **2009-01-01 — Loan Sanc…**: Rajasthan Financial Corporation sanctioned another loan of Rs. 2,40,00,000/- to 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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