# In the matter of Shreesaibaba Infraprojects Pvt. Ltd. CP (IB) No. 32-ALD-2021

> NCLT judgment dated 2022-06-13. Citation: TCN-2022-NCLT-02245. The case involves an application under Section 7 of the Insolvency and Bankruptcy Code (IBC)…

- **Court:** NCLT
- **Order date:** 13 Jun 2022
- **Citation:** TCN-2022-NCLT-02245
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/shreesaibaba-infraprojects-pvt-ltd-cp-ib-no-32-ald-2021-04a08622

## Summary

### Background

The case involves an application under Section 7 of the Insolvency and Bankruptcy Code (IBC) 2016 by Ambica Enclave Private Limited & Ors. (Financial Creditors) seeking initiation of the Corporate Insolvency Resolution Process (CIRP) against Shreesaibaba Infra Projects Pvt. Ltd. (Corporate Debtor). The Financial Creditors had granted a loan of Rs. 16 Crores to various companies of Proplarity Home Pvt. Ltd. (PHPL), which defaulted on repayment. To secure the repayment, an arrangement was made to sell properties, with the Financial Creditors as confirming parties. A sale deed dated 2017-05-01 was executed by PHPL in favor of the Corporate Debtor, stipulating a payment of ₹3,86,10,000 to the Financial Creditors. However, the cheques were never handed over, and no

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## Facts

Ambica Enclave Private Limited & Ors. (Financial Creditors) filed an application under Section 7 of the IBC against Shreesaibaba Infra Projects Pvt. Ltd. (Corporate Debtor) seeking initiation of CIRP. The Financial Creditors had granted a loan of Rs. 16 Crores to Proplarity Home Pvt. Ltd. (PHPL), which defaulted on repayment. To secure the repayment, PHPL entered into an arrangement to sell properties, with the Financial Creditors as confirming parties. A sale deed dated 2017-05-01 was executed by PHPL in favor of the Corporate Debtor, stipulating a payment of ₹3,86,10,000 to the Financial Creditors as per Clause 35. However, the cheques were never handed over, and no payment was made. The Financial Creditors also claimed that ₹20,00,000 was paid to the Corporate

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## Issues and analysis

### Issue 1: Whether a financial debt exists between Ambica Enclave Private Limited & Ors. (Financial …

**Ratio:** A financial debt is defined under Section 5(8) of the IBC, 2016 as a debt along with

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**Reasoning:** The court reasoned that the loan was initially disbursed to Proplarity Home Pvt. Ltd.

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**Interpretation:** The court interpreted Section 5(8) of the IBC to require a direct financial

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**Application:** The court applied the ratio to the facts by noting that the loan was disbursed

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## Parties

- **Judges:** Rajasekha…; Virendra Kumar…
- **Appellants:** Ambica Enclave…
- **Respondents:** Shreesaibaba…
- **Advocates:** Alok Tri…; R.P. Ag…; +1 more

## Timeline

- **2016-01-01 — Enactment of…**: The Insolvency and…
- **2017-05-01 — Execution of S…**: Proplarity Home Pvt. Ltd. (PHPL) executed a sale deed in favor of Shreesaibaba Infra…

## 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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