# In the matter of Siroya Fm Constructions Private Limited

> NCLT judgment dated 2024-02-27. Citation: TCN-2024-NCLT-02360. The case involves a petition filed under Section 7 of the Insolvency and Bankruptcy Code, 2016…

- **Court:** NCLT
- **Order date:** 27 Feb 2024
- **Citation:** TCN-2024-NCLT-02360
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/siroya-fm-constructions-private-limited-14e05a49

## Summary

### Background

The case involves a petition filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) by Mr. Shrenik Dheerajmal Siroya, the Financial Creditor, against Siroya FM Constructions Private Limited, the Corporate Debtor, seeking to initiate Corporate Insolvency Resolution Process (CIRP). The Financial Creditor, who is also a 50% shareholder and director of the Corporate Debtor, claimed a default on a loan amounting to INR 33,53,70,739.90 as of 10.01.2020. Several intervention petitions were filed, including one by Shankerdeep Co-operative Housing Society Limited, with whom the Corporate Debtor had a development agreement, and others by individual investors and flat buyers. The interveners raised concerns about the validity of the debt, the conduct of the

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## Facts

Mr. Shrenik Dheerajmal Siroya, a director and 50% shareholder of Siroya FM Constructions Private Limited (the Corporate Debtor), filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) to initiate Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. The claim was based on an alleged financial debt of INR 33,53,70,739.90 as of 10.01.2020, arising from unsecured loans advanced by the Financial Creditor to the Corporate Debtor between 2007 and 2015. The Corporate Debtor is engaged in the business of developing and constructing buildings and real estate projects. The Financial Creditor claimed that the Corporate Debtor defaulted on 18.01.2020. The Financial Creditor issued a call notice on 10.01.2020. Shankerdeep

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## Issues and analysis

### Issue 1: Whether the claim of INR 33,53,70,739.90 constitutes a 'financial debt' under Section 5(8) of the …

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

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**Reasoning:** The NCLT observed that the transactions between the Financial Creditor and the Corporate

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**Interpretation:** The interpretation of 'financial debt' requires a clear demonstration that the

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**Application:** In this case, the NCLT found that the transactions did not meet the criteria of

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## Parties

- **Judges:** Anu Jagmoha…; KISHORE VEMULAPALL…
- **Respondents:** Siroya Fm…; Shrenik Dhirajmal…

## Timeline

- **2005-03-23 — Incorporation of…**: Siroya FM Constructions Private Limited…
- **2007-01-01 — Loan Advan…**: Financial Creditor advanced money 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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