# In the matter of Wave Megacity Centre Private Limited IA 2026 & 2378-2021 in Company Petition No. (IB)- 197(PB)-2021

> NCLT judgment dated 2022-06-06. Citation: TCN-2022-NCLT-02396. The case involves two applications, IA No. 2026/2021 and IA No. 2378/2021, filed under Section…

- **Court:** NCLT
- **Order date:** 6 Jun 2022
- **Citation:** TCN-2022-NCLT-02396
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/wave-megacity-centre-private-limited-ia-2026-2378-2021-in-company-petition-no-ib-aa46e045

## Summary

### Background

The case involves two applications, IA No. 2026/2021 and IA No. 2378/2021, filed under Section 65 of the IBC, 2016, seeking the dismissal of Company Petition No. (IB)-197(PB)/2021. This petition was filed under Section 10 of the IBC by Wave Megacity Centre Private Limited, seeking initiation of the Corporate Insolvency Resolution Process (CIRP) against itself. The applicants in the IAs are allottees of Wave Megacity Centre Private Limited, who allege that the company has defaulted in completing the construction project and handing over possession of properties despite accepting huge amounts of money from them. They claim the company's actions are malafide and aimed at usurping their lifetime savings. The applicants argue that the Corporate Debtor (CD) has filed the

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## Facts

Wave Megacity Centre Private Limited (Corporate Debtor) initiated Corporate Insolvency Resolution Process (CIRP) under Section 10 of IBC, 2016. The allottees of Wave Megacity Centre Private Limited filed IA No. 2026/2021 and IA No. 2378/2021 under Section 65 of IBC, 2016, seeking dismissal of the CIRP application, alleging malicious and fraudulent intent. The allottees claimed that the Corporate Debtor defaulted in completing construction and handing over possession despite receiving substantial funds. The Corporate Debtor allegedly siphoned off funds, concealed facts, and misled the Tribunal. An FIR was registered against the Corporate Debtor and its directors for offenses under Section 406, 420, and 120B of IPC, 1860. The Corporate Debtor's directors, including

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## Issues and analysis

### Issue 1: Whether the Corporate Debtor filed the application under Section 10 of the IBC with malicious and …

**Ratio:** The principle that fraud vitiates all judicial acts, as established in A.V. Papayya

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**Reasoning:** The Tribunal considered the evidence presented by the applicants, including the FIR,

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**Interpretation:** The term 'malicious' in the context of Section 65 of the IBC implies a wrongful

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**Application:** Based on the evidence and the definition of 'malicious', the Tribunal concluded

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## Parties

- **Judges:** Bhaskara Pantula…; HEMANT KUMAR…
- **Appellants:** Rakesh T…
- **Respondents:** Wave Megacity…

## Timeline

- **2011-01-01 — Project La…**: Wave Megacity Centre project was…
- **2014-10-01 — Refunds Pro…**: Corporate Debtor processed refunds between October 2014 and April 2021, aggregating over…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 65 — Fraudulent or malicious initiation of proceedings](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-65)

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