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Judgment
ORDER
PER: SHRI ASHOK KUMAR BHARDWAJ, MEMBER (J)
CP (IB) No. 585/ND/2025: The present petition has been preferred by the Petitioner, J.C. FLOWERS ASSET RECONSTRUCTION PVT. LTD, a company incorporated under the Companies Act, 2013 and registered as an asset reconstruction company pursuant to Section 3 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.
The Respondent, Bliss House Private Limited (also referred to as “Corporate Debtor”) is a private limited company incorporated under the Companies Act, 2013 and is engaged in the business of construction and real estate. The Corporate Debtor is a wholly owned subsidiary of RAB Enterprises (India) Private Limited (“RAB”), promoted by Ms. Bindu Kapoor, the wife of Mr. Rana Kapoor (“RAB Promoters”). Mr. Rana Kapoor was the founder and promoter of Yes Bank Limited ("Yes Bank”).
In and around 2017, RAB approached Sammaan Capital Limited (“SCL”) (previously known as Indiabulls Housing Finance Limited) seeking financial facilities, in favour of its wholly owned subsidiaries:-
Bliss House Private Limited
Imagine Estate Private Limited
Bliss Agri and Eco Tourism Private Limited
Bliss Abode Private Limited
Bliss Villa Private Limited
Imagine Home Private Limited
Imagine Habitat Private Limited
Imagine Residence Private Limited
These subsidiaries are collectively referred as “RAB Entities”.
From among the RAB Entities, SCL sanctioned and disbursed a loan facility to the Corporate Debtor by way of the Loan Agreement dated 29 March 2019 of INR 105 Crores. (“Bliss House Loan”).
It must be noted that SCL had also granted and disbursed another loan amounting to Rs. 70 crore vide another Loan Agreement (“the other Loan Agreement”), which has not been assigned to the Financial Creditor herein. As such, the present Petition is only being instituted on the strength of the Bliss House Loan mentioned above, which stands assigned to the Financial Creditor as of date.
In order to secure the repayment of the loan, the following documents were executed –
a. The Bliss House Loan is secured inter alia by various security instruments including mortgage deeds, hypothecation deeds, guarantees, deed of pledge of third parties (“Security Documents”) concerning moveable and immoveable assets (“Secured Assets”).
b. The RAB Promoters, executed a common Deed of Guarantee dated 29 March 2019, agreeing to stand as guarantors for the Bliss House Loan and to repay the amounts due and payable under the Bliss House Loan upon default and failure to repay by the Corporate Debtor.
c. The entities also executed an undated Deed of Hypothecation in favour of SCL, whereby Receivables arising from certain properties forming a part of the Deed of Hypothecation were hypothecated in favour of SCL.
The Security Documents contain extensive references to the Bliss House Loan Agreement and therefore, the Obligors (defined hereinbelow) have consciously accepted their obligations under both the Security Documents and the Bliss House Loan Agreement. In fact, Ms. Bindu Kapoor (the director of the Corporate Debtor) has executed the Bliss House Loan Agreement on behalf of the Corporate Debtor as well as the Security Documents on behalf of the Obligors. The Obligors named below are jointly and severally liable for the default in payment by the Corporate Debtor:
Imagine Estate Private Limited.
Imagine Home Private Limited.
Imagine Habitat Private Limited.
Imagine Residence Private Limited.
Bliss Agri and Eco Tourism Private Limited.
Further, the Loan Agreements stipulate that all the Obligors of the Corporate Debtor i.e., personal guarantors, mortgagors, hypothecators and pledgors, are jointly and severally liable for the repayment of the dues owed by the Corporate Debtor.
The tenure of the Loan Agreements was for a period of 60 months, with repayments to be done by way of EMIs, as more particularly described under the Loan Agreements. Pertinently, the Loan Agreement detailed multiple “Events of Default”, the occurrence whereof would vest SCL with the right to recall the loan and demand immediate repayment thereof, including interest and all other charges. One such ‘event of default’ is “Material Adverse Effect”, which includes a material adverse effect on the ability of any of the Obligors under the Loan Agreements to perform their obligations under the Loan Agreements.
During the tenure of the Loan Agreements, the repayment ability of the personal guarantors i.e., Mr. Rana Kapoor and Mrs. Bindu Kapoor was materially affected on account a criminal investigation initiated by the Directorate of Enforcement and the Central Bureau of Investigation into the activities of the personal guarantors. As a result, SCL formed a reasonable apprehension that the repayment ability of the Corporate Debtor and its obligors was materially affected.
It is on the basis of this Material Adverse Effect that SCL, by letter dated 9 March 2020, declared occurrence of an Event of Default under Clause 12.2 of Bliss House Loan Agreement and the other Loan Agreement ("Recall Notice”). Consequently, the loan facilities were recalled and the entire outstanding sum under the Bliss House Loan Agreement and the other Loan Agreement became immediately payable.
Accordingly in terms of the recall notice, the CD was called upon to repay the outstanding sum under the Bliss House Loan and the other Loan Agreement within 5 days i.e. on or before 14 March 2020.
In the meanwhile, SCL, invoking the arbitration clause under the Loan Agreements filed a Petition under Section 9 of the Arbitration and Conciliation Act, 1996 seeking interim measures in relation to the Loans and vide Order dated 13 March 2020, the Hon’ble High Court of Delhi was pleased to direct the Corporate Debtor to maintain status quo in relation to the securities offered under loan facilities.
On 14 March 2020, the Corporate Debtor and/or its obligors did not respond to the Recall Notice and did not repay the sum specified thereunder and consequently, owing the continued failure of the Corporate Debtor and/or its obligors to repay, the Bliss House Loan and the other Loan Agreement were declared as Non-Performing Asset (NPA) on 09.06.2020. Accordingly, SCL also issued Notices under Sections 13(2) and 13(4) of the SARFAESI Act, to the Corporate Debtor and or its obligors.
In the meanwhile, the Petitioner also commenced arbitration proceedings against the Corporate Debtor, which resulted in an Arbitral Award dated 28.03.2023 in favor of SCL, wherein the liability of the Corporate Debtor was crystallized and the Corporate Debtor and its obligors were directed to pay a cumulative sum of INR 1,96,87,24,418/- to SCL along with interest payable under the Bliss House Loan and the other Loan Agreement.
The Corporate Debtor has availed its remedy under Section 34 of the Arbitration and Conciliation Act, 1996, challenging the above Arbitral Award and the said Petition is presently pending adjudication and the Hon’ble High Court of Delhi has not passed any Order staying the effect of the Arbitral Award.
As such, till date, the Corporate Debtor has not repaid the sums in terms of the Arbitral Award and has therefore committed default in terms of Section 7 of the Insolvency and Bankruptcy Code, 2016. Even otherwise, in terms of the schedules of repayment laid down under the Loan Agreements, the Corporate Debtor has failed to repay the sums and as such, the Corporate Debtor has committed default.
On 29.03.2025, SCL and the Petitioner herein executed an Assignment Agreement, whereby all the rights of SCL in relation to the Bliss House Loan Agreement and the security documents in relation to the Bliss House Loan were assigned to the Petitioner herein and as such, the Petitioner stepped into the shoes of SCL and obtained all rights to enforce the securities offered under the Bliss House Loan and the other Loan Agreement and to take any legal remedies to enforce the repayment of the outstanding sums under Bliss House Loan and the other Loan Agreement and subsequently, the said Assignment Agreement has been duly registered.
It is clear from the position set out above that the Corporate Debtor has defaulted in its obligations under the Loan Agreements for Bliss House Loan and the other Loan Agreement and as on 11.09.2025 the Corporate Debtor is in default of a sum of Rs. 922,46,13,471/- INR 258,74,50,829/- (Indian Rupees Two Fifty-Eight Crore Seventy four Lakhs Fifty Thousand Eight Hundred and Twenty-Nine). (“Total Default Amount”).
The default has been committed by the Corporate Debtor –
a. On 14 March 2020, when the Corporate Debtor failed to repay the outstanding sum in terms of the Recall Notice.
b. On 18 August 2020, when the Corporate Debtor failed to repay the outstanding sum under the Loan Agreements in relation to Bliss House Loan and the other Loan Agreement, in terms of the Demand Notice.
c. Further, the default of the Corporate Debtor continued during the pendency of the arbitral proceedings, that is from 11 July 2020 till 28 February 2023.
d. On 28 February 2023 when the Arbitral Award was passed against the Corporate Debtor and the quantum of the default under the Loan Agreements for Bliss House Loan and the other Loan Agreement was crystallized at INR 1,96,87,24,418/- along with interest to SCL along with interest (“Awarded Amount”).
e. On 29 May 2023 when the Awarded Amount was not repaid to SCL in terms of the timeline stipulated under the Arbitral Award.
f. The default occurred on the dates when instalments under the Bliss House Loan were due and the Corporate Debtor failed to make payments.
g. The default is continuing as on date since neither the Corporate Debtor nor its Obligors have repaid the Default Amount under the Loan Agreements for Bliss House Loan.
In the reply filed by it, the CD has espoused thus:-
The petition is not maintainable as the debt and default cannot be said to be crystalized, considering the challenge to the Award under Section 34 of the Arbitration and Conciliation Act, 1996.
There was no default by the Respondents on the date of the issuance of the Loan Recall Notice dated 09.03.2020.
The JCF has sought to recover the entire claim under the Award, despite their assignment admittedly pertains only to a portion of the Award, failing to detail any computation of how the alleged arises out of the said Award.
The Financial Creditor is seeking execution of an Award under garb of IBC proceedings.
The petition is barred by limitation.
Initiation of CIRP would frustrate the proceedings under Section 34 of the Arbitration Act and place the Respondent in an irredeemable position, incapable of restitution.
Indubitably, it was RAB Enterprises (India) Private Limited (RAB), through its promoter Ms. Bindu Kapoor and Mr. Rana Kapoor (RAB Promoters) who approached Samman Capital Limited (SCL) (previously known as Indiabulls Housing Finance Limited) seeking financial facilities, in favour of its wholly owned subsidiaries viz. Bliss House Private Limited, Imagine Estate Private Limited, Bliss Agri and Eco Tourism Private Limited, Bliss Abode Private Limited, Bliss Villa Private Limited, Imagine Home Private Limited, Imagine Habitat Private Limited, Imagine Residence Private Limited.
Apparently, the financial facilities availed by the CD before us viz. Bliss House Private Limited and Bliss Abode Private Limited qua which CP (IB)-474/ND/2025 was filed could be availed by following the same process. Thus, the issue involved in the present petition is exactly identical to the one involved in CP (IB)- 474/ND/2025. The said petition could be admitted in terms of the order dated 15.12.2025, relevant excerpt of the order reads thus:-
“14.As far as the plea regarding the financial facility is concerned, even the CD has not disputed the same. The only plea raised by CD is that for first sixty months it was liable to pay the interest only and it was only after expiry of such period, the liability to repay the principal amount could arise. However, it is not the case of the CD that even after expiry of sixty months, it offered any schedule to repay the amount of debt. Apparently, the CD failed to repay the outstanding amount of debt in terms of the Recall Notice, on 14.03.2020 as also in terms of the Demand Notice, on 18.09.2020. Besides, the default continued during the pendency of Arbitral Proceedings from 29.06.2020 till 28.02.2023. It is not so that the liability of the CD to pay the amount of debt occurred only after the Award dated 28.02.2023. The CD had admittedly availed the financial facility from the FC and had not honoured the Recall Notice. The Recall Notice was issued on 09.03.2020 by the Petitioner, recalling the entire loan facility. The CD failed to make the payment in terms of the Recall Notice and the outstanding amount remained over due for a period of more than 90 days. Thus, the account of the CD could be declared as NPA on 09.06.2020. In the Recall Notice dated 09.03.2020 (Annexure P-11), the FC could specifically allege that the default had already occurred. The schedule to the Recall Notice contains the details of the outstanding amount of debt. It is the case of the CD itself that for a period of sixty months it was liable to pay only interest and not the principal amount. Thus, apparently it did not repay the principal amount and committed default.
15.The liability to pay the amount of debt and default committed by the CD is not founded on the Arbitral Award along, but is with reference to Loan Agreement and liability to repay the amount of debt, defaulted to be paid. The schedule 1 to Recall Notice reads thus:-
16.As far as the Arbitral Award dated 28.02.2023 is concerned, in view of the judgment of the Hon’ble Supreme Court in Dena Bank vs. C. Shivakumar Reddy and Anr. (Civil Appeal No. 1659 of 2020) the same can be relied upon to deal with the issue of limitation. In the said judgment, the Hon’ble Supreme Court ruled that a decree and/or final adjudication would give rise to a fresh period of limitation. Paras 25, 130 and 131 reads thus:-
“25.Another question which arises for the consideration of this Court is, whether a final judgment and decree of the DRT in favour of the Financial Creditor, or the issuance of a Certificate of Recovery in favour of the Financial Creditor, would give rise to a fresh cause of action to the Financial Creditor to initiate proceedings under Section 7 of the IBC within three years from the date of the final judgment and decree, and/or within three years from the date of issuance of the Certificate of Recovery.
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130.In effect, this Court speaking through Nariman J., approved the proposition that an application under Section 7 or 9 of the IBC may be time barred, even though some other recovery proceedings might have been instituted earlier, well within the period of limitation, in respect of the same debt. However, it would have been a different matter, if the applicant had approached the Adjudicating Authority after obtaining a final order and/or decree in the recovery proceedings, if the decree remained unsatisfied. This Court held that a decree and/or final adjudication would give rise to a fresh period of limitation for initiation of the Corporate Insolvency Resolution Process.
131.It is true that the finding of Patna High Court in Ferro Alloys Corporation Limited v. Rajhans Steel Limited (supra) was rendered in the context of Section 434(1)(b) of the Companies Act 1956, which provided that a company would be deemed to be unable to pay its debts if execution or other process issued on a decree or order of any Court or Tribunal in favour of a creditor of the company was returned unsatisfied in whole or in part.”
17.Apparently, the present petition has been filed within three years of the Arbitral Award. The said judgment of the Hon’ble Supreme Court Dena Bank vs. C. Shivakumar Reddy and Anr. (Civil Appeal No. 1659 of 2020) also provides that in terms of the provisions of Section 238 of IBC, 2016, the present proceedings would continue notwithstanding anything in consistent thereto. Para 84 of the judgment reads thus:-
“84.IBC has overriding effect over other laws. Section 238 of the IBC provides that the provisions of the IBC shall have effect, notwithstanding anything inconsistent therewith contained in any other law, for the time being in force, or any other instrument, having effect by virtue of such law.”
18.Apparently, even after the Arbitral Award, the CD has not made the payment of amount of debt. Filling of appeal by it to challenge the Award is in a way admission of default. In terms of the provisions of Section 7(3) of IBC, 2016, the FC should along with the application furnish record of the default recorded with IU (Information Utility) and should provide the name of RP. The application satisfies both the requirements. The name of the proposed IP has been given in Part-III of the application. The Part-III reads thus:-
19.The Form 2 furnished by the IP has been placed on record as enclosure to the application. In the said Form, the IP has declared that no disciplinary proceedings are pending against him. Thus, the requirements of Section 7 (3) and (5) (a) of IBC, 2016 are satisfied. In the wake, we are left with no option but to admit the present petition and initiate the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. Ordered accordingly.”
Additionally, during the course of hearing the Ld. Counsel for the CD could also espouse that the default could be constituted in terms of clause 12.1 and 12.2 of the Loan Agreement. As can be seen from clause 12.1.8 of the Agreement, any event or circumstances which the lender could believe as an event of material adverse or prejudicial effect in any manner on the ability of the obligor(s) to perform or comply with its / their obligation under the Loan Agreement could constitute event of default. The Clause 12.2 indicates that the failure of repayment of amount of debt on the same being recalled could also constitute default. The Clause 12.1 and 12.2 of the Agreement reads thus:-
It was the matter of satisfaction of the creditor to form an opinion regarding occurrence of the circumstances mentioned in Clause 12.1 of the Loan Agreement for the purpose of issuance of Recall Notice. As has been analysed in aforementioned order dated 15.12.2025, the Arbitral Award had the ramification of extension of the period of the limitation. The issue raised by the Respondents by way of their reply is covered by the judgment of the Hon’ble Supreme Court in Dena Bank vs. C. Shivakumar Reddy and Anr. (Civil Appeal No. 1659 of 2020). We are bound by the view taken by the Hon’ble Supreme Court in the said judgment referred to in para 17 of aforementioned order dated 15.12.2025.
In the totality of the facts and circumstances, we are of the view that the present petition deserved to be admitted. Ordered Accordingly. Sapan Mohan Garg, IP whose name is proposed by the Applicant is appointed as IRP and e-mail [email protected].
In light of the above facts and circumstances, it is, hereby ordered thus:-
As a consequence of the Application C.P. (IB) 585/ND/ 2025 being admitted in terms of Section 7 of the Code, moratorium as envisaged under the provisions of Section 14(1) of the Code, shall follow in relation to the Respondent/(CD) as per clauses (a) to (d) of Section 14(1) of the Code. However, during the pendency of the moratorium period, terms of Section 14(2) to 14(3) of the Code shall come into force.
In pursuance of Section 13 (2) of the Code, we direct the IRP or the RP, as the case may be to make a public announcement immediately with regard to the admission of this application under Section 7 of the Code. The expression ‘immediately' means within three days as clarified by Explanation to Regulation 6 (1) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.
During the CIRP period, the management of the Respondent/CD shall vest in the IRP or the RP, as the case may be, in terms of Section 17 of the IBC. The officers and managers of the Respondent/CD shall provide all documents in their possession and furnish every information in their knowledge to the IRP within one week from the date of receipt of this Order, in default of which coercive steps will follow. There shall be no future opportunities in this regard.
The IRP is expected to take full charge of the Respondent/CD's assets, and documents without any delay whatsoever. He is also free to take police assistance in this regard, and this Court hereby directs the Police Authorities to render all assistance as may be required by the IRP in this regard.
The IRP or the RP, as the case may be shall submit to this Adjudicating Authority periodical report with regard to the progress of the CIRP in respect of the Respondent/Corporate Debtor.
The Applicant is directed to deposit Rs.2,00,000/- (Two Lakh only) with the IRP to meet the immediate expenses. The amount, however, will be subject to adjustment by the Committee of Creditors as accounted for by Interim Resolution Professional and shall be paid back to the Applicant.
In terms of Section 7(7) of the Code, the Registry/Court Officer is hereby directed to communicate a copy of the order to the Applicant/FC, the Respondent/CD, the IRP and the Registrar of Companies, NCR, New Delhi, by Speed Post and by email, at the earliest but not later than seven days from today. The Registrar of Companies shall update his website by updating the status of the Respondent/CD and specific mention regarding admission of this petition must be notified.
The Registry/Court Officer is further directed to send a copy of this order to the Insolvency and Bankruptcy Board of India for their record.