Ms. Ila B Pancholi vs M/S Kavya Buildcon Pvt Ltd

IN THE MATTER OF: Ila B. Pancholi ...Appellants Versus Kavya Buildcon Pvt. Ltd. ...Respondents

Present: For Appellant : Mr. Rahul Chitnis and Ms. Shwetal Shepal, Advocates.

For Respondents : Mr. Nakul Mohta, Mr. Rohit Debnath and Ms. Surabhi Agarwal, Advocates.

ORDER

(Hybrid Mode)

18.11.2025: Heard counsel for the appellant as well as Counsel for the

respondent.

2. This appeal has been filed against the order dated 22.02.2024 by which

order Adjudicating Authority has allowed IA No. 1536/2021. The brief facts

necessary to be noticed for assigning the appeal are; the respondent has been

constructing a building known as 'Tansa City-I' situated at Khardi,

Maharashtra. A letter of allotment dated 14.01.2016 was issued in the name

of husband of the appellant who died on 13.08.2022. The appellant's

husband approached the NCLT in the year 2019. Application was filed by the

husband of the appellant being CP (IB) No. 216/MB/2019. The appellant's

case is that the respondent agreed to pay entire amount which was due to the

deceased husband concerning the offer made by the appellant to refund the amount. Settlement terms were recorded between the parties as consent

terms in the Company Petition being Consent Terms dated 16.10.2019 under

which the corporate debtor agreed to refund the amount of Rs.80,68,664/-. In

pursuance of the consent terms Company Petition was dismissed as not

pressed on 17.10.2019. It appears that the amount was not paid to the

appellant as agreed, an I.A. No. 1536 of 2021 was filed by the appellant for

reviving the company petition which was opposed by the Respondent.

Adjudicating Authority in the impugned order has observed that in view of the

amendment made in Section 7 of the IBC application is not maintainable as

on date and the application was allowed however, liberty was granted to

corporate debtor to press for the dismissal of the application if the amended

provision of Section 7 are not complied within 30 days. In para-13 of the

order the following had been directed:-

"13. As a result of the above discussion, we deem it appropriate to allow the application for revival of the Company Petition in the light of the violation of the consent terms by the Corporate Debtor. However, the Respondent/Corporate Debtor shall be at liberty to press for dismissal of the application, if the amended provisions of Section 7 are not complied within the stipulated period of 30 days. I.A. No. 1536/2021 is allowed and disposed of accordingly to the extent indicated above."

Appellant aggrieved by this order has come up in this appeal. Ld. Counsel for

the appellant contended that in view of the settlement which was entered

between the parties the nature of the debt of the appellant became a financial

creditor not a financial creditor in a class hence amendment in Section 7 are

2 of 4 Company Appeal (AT) (Ins) No. 788 of 2024 not applicable on the appellant and it was not required to comply, the amend

Section 7 application as per amended provisions. Ld. Counsel for the

appellant submits that the Corporate Debtor was obliged to refund the

amount as agreed. Counsel for the respondents submitted that the claim of

the appellant was based on allotment and she continues to be as a creditor in

class and for initiating insolvency proceeding Section 7 as amended required

to be complied with.

3. We have considered the submissions of counsel for the parties and

perused the records.

4. From the order of the Adjudicating Authority it is clear that the

application was allowed, however, the appellant was directed to comply with

the amended provisions of Section 7 within 30 days. The submission of the

appellant that after consent terms entered between the parties the nature of

the claim of the appellant is no longer as creditor in class does not appeal to

us. The claim of the appellant was on basis of allotment which was issued in

the name of the deceased husband of the appellant. Settlement between the

parties was a mode and manner of refund of the amount which has not been

complied with. The appellant is free to take such proceedings as available in

law but for initiating proceedings under Insolvency the amended provisions

under Section 7 are required to be complied with if the application by

appellant is pressed for insolvency against the corporate debtor.

5. We thus are of the view that the direction of the Adjudicating Authority

to comply with the amended provisions of Section 7 cannot be faulted with. It

3 of 4 Company Appeal (AT) (Ins) No. 788 of 2024 has been brought into the notice of the court that amended provisions have

not been complied with and no compliance has yet been made of the amended

provisions of Section 7. The application shall be deemed to be withdrawn in

pursuance of the statutory provisions of Section 7 third proviso. We, however,

observe that in so far as the claim of the appellant for refund against the

corporate debtor, the appellant is free to take such remedy in law as

permissible in accordance with the law.

With these observations, we dismiss the appeal.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical) harleen/MD

4 of 4 Company Appeal (AT) (Ins) No. 788 of 2024