# In the matter of Yes and Yes Infracon Pvt. Ltd. IBA-403-2020

> NCLT judgment dated 2023-04-24. Citation: TCN-2023-NCLT-03666. Step Stone Infras Private Limited filed an application under Section 7 of the Insolvency and…

- **Court:** NCLT
- **Order date:** 24 Apr 2023
- **Citation:** TCN-2023-NCLT-03666
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/yes-and-yes-infracon-pvt-ltd-iba-403-2020-08e5f5a2

## Summary

### Background

Step Stone Infras Private Limited filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against Yes and Yes Infracon (P) Ltd., the Corporate Debtor. The Financial Creditor claimed a debt of rupees one crore, with the date of default stated as 31.12.2019. The Financial Creditor and Srico Projects Pvt. Ltd. (SRICO) had entered into a Memorandum of Understanding (MoU) dated 14.06.2017 for sub-contracting the construction of dwelling units, with the Financial Creditor depositing a refundable security deposit. Subsequently, the Financial Creditor and the Corporate Debtor entered into another MoU dated 28.09.2019, where the Financial Creditor agreed to transfer the construction

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## Facts

Step Stone Infras Private Limited (Financial Creditor) and Srico Projects Pvt. Ltd. (SRICO) entered into a MoU on 2017-06-14 for sub-contracting construction. The Financial Creditor deposited a refundable security deposit with SRICO. Later, on 2019-09-28, the Financial Creditor and Yes and Yes Infracon (P) Ltd. (Corporate Debtor) entered into another MoU, where the Financial Creditor transferred the construction work to the Corporate Debtor, who agreed to pay the security deposit. The Corporate Debtor issued post-dated cheques totaling Rs.85,00,000 as a guarantee, but these were dishonored. The Financial Creditor claimed a debt of rupees one crore, with a default date of 2019-12-31. The Corporate Debtor argued that the debt was not a financial debt as there was no

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## Issues and analysis

### Issue 1: Whether the amount claimed by the Applicant qualifies as a 'financial debt' under Section 5(8) of …

**Ratio:** To qualify as a 'financial debt' under Section 5(8) of the IBC, 2016, the debt should be

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**Reasoning:** The Adjudicating Authority reasoned that in the instant case, there was neither

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**Interpretation:** Section 5(8) of the IBC, 2016, defines 'financial debt' as a debt along with

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**Application:** In this case, the amount was initially deposited with SRICO and later

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## Parties

- **Judges:** SANJIV…; SAMEER…
- **Appellants:** Step Stone Infras…
- **Respondents:** Yes and Yes…

## Timeline

- **2017-06-14 — MoU between Financial…**: The Financial Creditor and Srico Projects Pvt. Ltd. (SRICO) entered into a Memorandum of…
- **2019-09-28 — MoU between Financial Creditor and Corporate…**: The Financial Creditor and the Corporate Debtor entered into another MoU, where 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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