# In the matter of Zeal Developers Private Limited (IB) -237(ND)2019

> NCLT judgment dated 2022-12-16. Citation: TCN-2022-NCLT-00136. Smt. Sushila Lakhotia, the Applicant/Operational Creditor, filed a petition under Section 7 of…

- **Court:** NCLT
- **Order date:** 16 Dec 2022
- **Citation:** TCN-2022-NCLT-00136
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/zeal-developers-private-limited-ib-237nd2019-af5a7cb8

## Summary

### Background

Smt. Sushila Lakhotia, the Applicant/Operational Creditor, filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s. Zeal Developers Private Limited, the Respondent. The Adjudicating Authority initially dismissed the application on 28.05.2019. However, the NCLAT set aside this order on 23.02.2022 in Company Appeal (AT) (Ins.) No. 711 of 2019, directing the Adjudicating Authority to pass an order for admission of the application. The NCLAT also allowed for the possibility of a settlement between the parties.

## Facts

Smt. Sushila Lakhotia, the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, to initiate CIRP against Zeal Developers Private Limited, the Corporate Debtor. The Corporate Debtor was incorporated on 08.09.2006 under the Companies Act, 1956. The Adjudicating Authority initially dismissed the application on 28.05.2019. The Financial Creditor appealed to the NCLAT, which set aside the Adjudicating Authority's order on 23.02.2022 and directed it to admit the application. The NCLAT's order allowed for a potential settlement between the parties. The Applicant's counsel submitted that no effort had been made by the Respondent to settle the debt. The Authorized Share Capital of the Respondent is Rs. 24,90,000/- and Paid-up

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority was correct in initially dismissing the application under …

**Ratio:** The NCLAT found that the Adjudicating Authority had committed an error in rejecting the

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**Reasoning:** The NCLAT's reasoning was based on its assessment of the merits of the application and

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**Interpretation:** This issue involves the interpretation of Section 7 of the IBC, 2016, and the

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**Application:** The NCLAT's decision to set aside the Adjudicating Authority's order

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## Parties

- **Judges:** SH. BACHU VENKAT…; SH. L. N.…
- **Appellants:** Sushila La…
- **Respondents:** Zeal Developers…

## Timeline

- **2006-09-08 — Incorporation of Zeal…**: Zeal Developers Private Limited was…
- **2019-05-28 — Initial Dismissal of…**: The Adjudicating Authority dismissed 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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