# In the matter of Satra Properties (India) Limited

> NCLT judgment dated 2023-11-22. Citation: TCN-2023-NCLT-00617. IIFL Home Finance Limited filed an application (I.A. 1686/2020) under Section 60(5) of the…

- **Court:** NCLT
- **Order date:** 22 Nov 2023
- **Citation:** TCN-2023-NCLT-00617
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/satra-properties-india-limited-5f696e17

## Summary

### Background

IIFL Home Finance Limited filed an application (I.A. 1686/2020) under Section 60(5) of the Insolvency & Bankruptcy Code, 2016, seeking directions to the Resolution Professional regarding the admission of its claim as a financial debt in the Corporate Insolvency Resolution Process (CIRP) of Satra Properties (India) Limited. The applicant had granted loan facilities to the corporate debtor, and a Deed of Security was executed where Satra Properties Developers Pvt. Ltd. (SPDPL) provided security on behalf of the corporate debtor. The Resolution Professional rejected the applicant's claim, stating that the Deed of Security discharged the corporate debtor's obligations.

## Facts

On 28.3.2015, IIFL Home Finance Limited (Applicant) executed a loan agreement with Satra Properties (India) Limited (Corporate Debtor) for a loan facility of Rs. 20.00 crores. Necessary documents like a Mortgage Deed, a demand Promissory Note, and a Letter of Continuity were executed. On 27.7.2018, another loan agreement granted an additional loan facility of Rs. 5.21 Crores. IIFL Finance Ltd., the Applicant's holding company, also granted independent loan facilities to the Corporate Debtor. The Corporate Debtor defaulted on the loan facilities. IIFL Finance Ltd. filed Company Petition (IB) No. 176/2019 u/s 7 of the Code. Consent terms were filed on 9.9.2019, and the Corporate Debtor acknowledged the debt. An Amendment Agreement was also entered into on 9th September

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## Issues and analysis

### Issue 1: Whether the Deed of Security dated 20.3.2020 discharges the Corporate Debtor qua the Applicant and …

**Ratio:** The principle is that if a debt is discharged out of the proceeds of a security interest

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**Reasoning:** The court reasoned that the Deed of Security provided additional security and a source of

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**Interpretation:** The Deed of Security is interpreted as providing additional security for the

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**Application:** The court applied the principle to the facts, finding that the Deed of Security

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## Parties

- **Judges:** Prabhat…; V.G. B…
- **Appellants:** IIFL Home Finance…
- **Respondents:** Satra Properties…

## Timeline

- **2015-03-28 — Loan Agre…**: IIFL Home Finance Limited executed a loan agreement with Satra Properties (India) Limited…
- **2018-07-27 — Additional Loan…**: Another loan agreement was executed granting an additional loan facility of Rs. 5.21…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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