# In the matter of Shrinathji Business Ventures Pvt. Ltd.

> NCLT judgment dated 2024-07-29. Citation: TCN-2024-NCLT-00928. The case involves multiple Interlocutory Applications (IAs) filed in connection with the…

- **Court:** NCLT
- **Order date:** 29 Jul 2024
- **Citation:** TCN-2024-NCLT-00928
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/shrinathji-business-ventures-pvt-ltd-cad91002

## Summary

### Background

The case involves multiple Interlocutory Applications (IAs) filed in connection with the Corporate Insolvency Resolution Process (CIRP) of Shrinathji Business Ventures Pvt. Ltd. The CIRP was initiated based on an application filed by homebuyers alleging non-allotment of flats in the 'Guman Eternity' project. The Directorate of Enforcement (ED) has raised concerns about fraudulent activities related to the initiation of CIRP and the involvement of related parties. Canara Bank, a financial creditor, also filed an IA seeking acceptance of its claim, which was initially rejected by the Resolution Professional (RP) due to belated submission. The core issue revolves around allegations of fraudulent initiation of CIRP, the validity of claims by homebuyers, and the conduct of

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## Facts

The main Petition bearing CP No. (IB) 161/7/JPR/2020 was filed by Arti Kanoongo, Anita Khandelwal, Vinod Kumar Kanoongo and Sivraj Jangid, who are homebuyers, under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016 seeking initiation of the Corporate Insolvency Resolution Process (CIRP) of Shrinathji Business Ventures Pvt. Ltd. The homebuyers alleged non-allotment of flats in the 'Guman Eternity' project. The Directorate of Enforcement (ED) is investigating the Syndicate Bank fraud case, where Shankar Lal Khandelwal, a director of the Corporate Debtor, is accused of misusing KYC documents to fraudulently avail home loans. The ED alleges that the homebuyers are related parties of the Corporate Debtor and initiated the CIRP fraudulently. Canara Bank, a

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## Issues and analysis

### Issue 1: Whether the CIRP of the Corporate Debtor was initiated fraudulently or with malicious intent within …

**Ratio:** Section 65 of the IBC prescribes a stringent punishment for initiating insolvency

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**Reasoning:** The Adjudicating Authority found that the CIRP was initiated by related parties of the

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**Interpretation:** Section 65 is interpreted to mean that any initiation of CIRP with fraudulent

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**Application:** The Adjudicating Authority applied Section 65 to the facts of the case, finding

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## Parties

- **Judges:** Deep Chandr…; RAJEEV ME…
- **Appellants:** Arti Kan…
- **Respondents:** Shrinathji…

## Timeline

- **2020-01-01 — CP No. (IB) 161/7/JPR/20…**: The main Petition bearing CP No. (IB) 161/7/JPR/2020 was filed by Mrs. Arti Kanoongo &…
- **2021-12-23 — CIRP Init…**: Adjudicating Authority initiated the CIRP of the Corporate Debtor and appointed Mr.…

## 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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