# In the matter of ATS Infrastructure Ltd. (IB) – 885(ND)-2022

> NCLT judgment dated 2023-06-09. Citation: TCN-2023-NCLT-05478. The application was filed by Mr. Ranjit Rai Kohli & 5 ORS., the Financial Creditors…

- **Court:** NCLT
- **Order date:** 9 Jun 2023
- **Citation:** TCN-2023-NCLT-05478
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-new-delhi/ats-infrastructure-ltd-ib-885nd-2022-4ac0583e

## Summary

### Background

The application was filed by Mr. Ranjit Rai Kohli & 5 ORS., the Financial Creditors (FC)/Applicants on 09.11.2022, before the Adjudicating Authority, under Section 7 of the Insolvency and Bankruptcy Code, 2016 for initiating the Corporate Insolvency Resolution Process (“CIRP”) against the Corporate Debtor (CD)/Respondent viz., M/s. ATS INFRASTRUCTURE LTD., on the ground that the Corporate Debtor has defaulted to make a Payment of a sum of Rs. 10,74,75,585/-.

## Facts

The application was filed under Section 7 of the Insolvency and Bankruptcy Code, 2016.

The Financial Creditors invested in the real estate project namely, 'ATS Dolce', being developed by M/s Domus Greens Private Limited.

The Financial Creditors invested in the Project on the assurances given by the Corporate Debtor that their respective units shall be bought back at a contractually agreed sale consideration on expiry of the prescribed time period.

The Corporate Debtor along with DGPL had launched the Project with various representations and promises regarding the purchase of units rendering huge returns in terms of the 'buy-back' scheme.

The Corporate Debtor issued post-dated cheques towards the buy-back amount, which were later dishonoured.

…

## Issues and analysis

### Issue 1: Whether the Applicant falls in the category of Financial Creditor as per Section 5(7) of the Code …

**Ratio:** The status of “Financial Creditor” cannot be accorded to a person who, in the garb of a

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**Reasoning:** The Adjudicating Authority found that the Applicants were speculative investors and not

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**Interpretation:** The definition of Financial Creditor under Section 5(7) requires a genuine

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**Application:** The Applicants were not considered Financial Creditors as their investment was

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## Parties

- **Judges:** BACHU VENKAT…; ATUL CHAT…
- **Appellants:** Ranjit Rai…; Meena Mal…; +4 more
- **Respondents:** ATS INFRASTRUCTURE…
- **Advocates:** Piyush…; Akshay Sriv…; +3 more

## Timeline

- **2022-11-09 — Application…**: Application filed by the Financial Creditors before the Adjudicating Authority under…
- **2023-06-09 — Order Pron…**: Order pronounced…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(7) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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