# In the matter of Rudra Buildwell Projects Pvt. Ltd. CP IB 505-PB-2020

> NCLT judgment dated 2023-06-07. Citation: TCN-2023-NCLT-03045. The case involves an application filed by M/s. Japan Estates Pvt. Ltd. (Financial Creditor)…

- **Court:** NCLT
- **Order date:** 7 Jun 2023
- **Citation:** TCN-2023-NCLT-03045
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/rudra-buildwell-projects-pvt-ltd-cp-ib-505-pb-2020-bca3c16c

## Summary

### Background

The case involves an application filed by M/s. Japan Estates Pvt. Ltd. (Financial Creditor) under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against M/s. Rudra Buildwell Projects Pvt. Ltd. (Corporate Debtor) for a default in repayment of debt amounting to Rs. 1,17,18,000/- as of 01.10.2019, with an interest rate of 23.17% per annum. The Corporate Debtor had approached the Financial Creditor in September 2017 for developing a residential township, and the Financial Creditor expressed interest in purchasing residential units. A Master Apartment Purchase Agreement was executed, and the Financial Creditor paid Rs. 2,03,58,000/-. The Corporate Debtor failed to hand over the flats within the stipulated

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## Facts

In September 2017, Rudra Buildwell Projects Pvt. Ltd. (Corporate Debtor) approached Japan Estates Pvt. Ltd. (Financial Creditor) for funds to develop a residential township called 'Raudra Palace Heights'. Japan Estates agreed to purchase residential units in the project, paying Rs. 2,03,58,000/- under a Master Apartment Purchase Agreement dated 27.02.2017. Rudra Buildwell failed to deliver the flats within the agreed timeframe. Consequently, a Termination Agreement was executed on 07.07.2017, where Rudra Buildwell admitted its inability to hand over the flats and agreed to refund the consideration with interest. Rudra Buildwell made some payments but defaulted on the remaining amount. As of 01.10.2019, the outstanding debt was Rs. 1,17,18,000/- with a 23.17% annual

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## Issues and analysis

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

**Ratio:** The proviso to Section 7 of the IBC requires financial creditors who are allottees under

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**Reasoning:** The Tribunal considered the argument that the Financial Creditor, being a flat purchaser,

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**Interpretation:** The interpretation of Section 7 and its proviso hinges on the status of the

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**Application:** In this case, the Tribunal found that the Termination Agreement altered the

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## Parties

- **Judges:** BACHU VENKAT…; RAHUL BHA…
- **Appellants:** M/s. Japan…
- **Respondents:** M/s. Rudra…
- **Advocates:** P. Na…; Rahul Mal…; +4 more

## Timeline

- **2017-02-27 — Master Apartment…**: M/s. Japan Estates Pvt. Ltd. and M/s. Rudra Buildwell Projects Pvt. Ltd. entered into a…
- **2017-07-07 — Termination A…**: A Termination Agreement was executed between M/s. Japan Estates Pvt. Ltd. and M/s. Rudra…

## 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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