# In the matter of Star Valley Heights LLP CP No. (IB)- 217-7-JPR-2019

> NCLT judgment dated 2023-01-13. Citation: TCN-2023-NCLT-05051. The case involves an application filed by Shri Gaurav Agarwal (Financial Creditor) under…

- **Court:** NCLT
- **Order date:** 13 Jan 2023
- **Citation:** TCN-2023-NCLT-05051
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/star-valley-heights-llp-cp-no-ib-217-7-jpr-2019-19e62f0a

## Summary

### Background

The case involves an application filed by Shri Gaurav Agarwal (Financial Creditor) under Section 7 of the Insolvency and Bankruptcy Code, 2016, against M/s Star Valley Heights LLP (Corporate Debtor) seeking initiation of Corporate Insolvency Resolution Process (CIRP) due to default in repayment of a loan amount. The Financial Creditor had paid a registration amount to purchase a flat in the Corporate Debtor's project, 'Star Valley Aegina'. An Agreement to Sale was entered on 12.04.2016. The project was later scrapped, and a new project named 'Laxmi Vilas' was started at the same location. The Financial Creditor then discovered that the new project was registered with RERA with a commencement date of 11.01.2017. The Corporate Debtor admitted to receiving a token amount

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## Facts

Shri Gaurav Agarwal (Financial Creditor) paid Rs. 4,39,290/- to M/s Star Valley Heights LLP (Corporate Debtor) as a registration amount for a flat in the 'Star Valley Aegina' project. An Agreement to Sale was executed on 2016-04-12 for Flat No. 1002, a 3BHK flat with an area of 1220.25 sq. ft. The Corporate Debtor was to raise a demand note for payment as per the construction plan. The project was later scrapped, and a new project, 'Laxmi Vilas', was started on the same location, registered with RERA with commencement date 2017-01-11. The Financial Creditor discovered this in January 2019. The Corporate Debtor admitted to receiving the token amount. The Corporate Debtor offered a flat in 'Shree Ratna' project, adjusting the penalty amount. The Financial Creditor

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## Issues and analysis

### Issue 1: Whether the Applicant (Financial Creditor) has established a financial debt and default by the …

**Ratio:** Section 7 of the IBC requires the Applicant to establish the existence of a financial

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**Reasoning:** The Adjudicating Authority acknowledged the Applicant's claim of default for the loan

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**Interpretation:** Section 7 of the IBC is interpreted to require proof of financial debt and

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**Application:** While the Applicant initially demonstrated a financial debt and default, the

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## Parties

- **Judges:** Deep Chandr…; Prasanta Kumar…
- **Appellants:** Gaurav Ag…
- **Respondents:** M/S Star Valley…

## Timeline

- **2016-04-12 — Agreement t…**: Agreement to Sale entered between Shri Gaurav Agarwal and M/s Star Valley Heights LLP for…
- **2017-01-11 — Project Commencement…**: Commencement date of 'Laxmi Vilas'…

## 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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