# In the matter of Vedic Realty Private Limited

> NCLT judgment dated 2024-01-25. Citation: TCN-2024-NCLT-02899. Subham Capital Private Limited, a financial creditor, filed an application under Section 7 of…

- **Court:** NCLT
- **Order date:** 25 Jan 2024
- **Citation:** TCN-2024-NCLT-02899
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/vedic-realty-private-limited-da7be340

## Summary

### Background

Subham Capital Private Limited, a financial creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Vedic Realty Private Limited, the corporate debtor, seeking initiation of the Corporate Insolvency Resolution Process (CIRP). The corporate debtor had approached the financial creditor for loans in 2011. The financial creditor disbursed Rs. 2,00,00,000 on September 1, 2011, and Rs. 2,25,00,000 on January 6, 2012. Further disbursements were made between 2012 and 2016, totaling Rs. 18,50,00,000. The corporate debtor made payments towards the principal, with the last payment on April 7, 2021. After adjusting payments, Rs. 2,25,00,000 remained due, and with interest, the total outstanding was Rs. 2,42,65,775. A loan recall notice

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## Facts

Subham Capital Private Limited (Financial Creditor) extended loans to Vedic Realty Private Limited (Corporate Debtor) starting in 2011. Initial disbursements included Rs. 2,00,00,000 on September 1, 2011, and Rs. 2,25,00,000 on January 6, 2012, with further disbursements totaling Rs. 18,50,00,000 between 2012 and 2016. The loans carried interest at agreed rates. The Corporate Debtor made payments, with the last payment on April 7, 2021. After adjusting payments, Rs. 2,25,00,000 remained due as principal, totaling Rs. 2,42,65,775 with interest. A loan recall notice was issued on March 1, 2022. An earlier Section 7 petition (C.P. (IB) No.215/KB/2022) was withdrawn following a settlement agreement on November 18, 2022, where the Corporate Debtor acknowledged its debt and

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## Issues and analysis

### Issue 1: Whether the amount claimed to be in default, derived from the breach of terms of the Settlement …

**Ratio:** The ratio is that a Section 7 application can be filed based on the original financial

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**Reasoning:** The court reasoned that the application was filed under Section 7 of the I&B Code for

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**Interpretation:** The interpretation is that the existence of a settlement agreement and its

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**Application:** In this case, the Corporate Debtor breached the settlement agreement. However,

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## Parties

- **Judges:** BIDISHA BA…; D. Ar…
- **Appellants:** Subham Capital…
- **Respondents:** Vedic Realty…

## Timeline

- **2011-01-01 — Corporate Debtor…**: The Corporate Debtor approached the Financial Creditor for loans as financial assistance…
- **2011-09-01 — Initial Disbu…**: The Financial Creditor disbursed Rs.…

## 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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