# In the matter of Sky High Technobuild Private Limited

> NCLT judgment dated 2024-07-23. Citation: TCN-2024-NCLT-00969. Proplarity Infratech Private Limited filed an application under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 23 Jul 2024
- **Citation:** TCN-2024-NCLT-00969
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/sky-high-technobuild-private-limited-bdb5bcbd

## Summary

### Background

Proplarity Infratech Private Limited filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Sky High Technobuild Private Limited, citing a financial default of Rs. 4,70,00,000. The application was based on an alleged loan transaction where Proplarity Infratech claimed to have advanced Rs. 2,00,00,000 to Sky High Technobuild, with an interest rate of 18% p.a. The corporate debtor, Sky High Technobuild, contested the application, arguing that the transaction was not a financial debt but an advance for a property purchase, which was later forfeited due to non-payment of the balance amount. The NCLT examined whether the transaction qualified as a financial debt under

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## Facts

Proplarity Infratech Private Limited (Financial Creditor) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Sky High Technobuild Private Limited (Corporate Debtor). The Financial Creditor claimed a financial default of Rs. 4,70,00,000, including principal and interest, based on a loan of Rs. 2,00,00,000 advanced to the Corporate Debtor. The Corporate Debtor argued that the Rs. 2,00,00,000 was an advance for purchasing land, not a loan, and was forfeited due to non-payment of the balance. The Financial Creditor's balance sheet showed the amount as 'Advance Against Property,' while the Corporate Debtor's balance sheet initially showed it as 'Inter Corporate Deposit' and

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## Issues and analysis

### Issue 1: Whether Non-Existence of a Financial Contract …

**Ratio:** A financial debt can be proven through other relevant documents, and it is not mandatory

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**Reasoning:** The NCLT relied on the NCLAT's judgment in Agarwal Polysacks Ltd. v. K.K. Agro Foods

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**Interpretation:** The absence of a formal financial contract does not automatically render a

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**Application:** In this case, the NCLT found that the Financial Creditor did not provide

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## Parties

- **Judges:** Ramalingam…; AVINASH K.…
- **Appellants:** Proplarity…
- **Respondents:** Sky High Technobui…

## Timeline

- **2013-08-29 — Incorporation of…**: Proplarity Infratech Private Limited…
- **2006-07-13 — Incorporation of…**: Sky High Technobuild Private Limited…

## 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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