The National Company Law Tribunal (NCLT), New
Delhi, Bench-III in the case of Ajay Kumar Gupta & Anr, and
Mrs. Poonam Gupta vs. IERO Fiveriver Pvt. Ltd. [C.P. No.
IB-355/ND/2017] held that the amount payable by a builder to
buyer under a settlement deed resulting from non-fulfillment of
obligations (relating to allotment and possession) is
"financial debt" under Section 5(8) of the Insolvency and
Bankruptcy Code, 2016 (hereinafter referred to as
"IBC") and the buyer can file
application under Section 7 as "Financial Creditor" for
the recovery of the same.
Background Facts:
Mr. Ajay Kumar Gupta and Mrs. Poonam Gupta (hereinafter
"Applicants" or "Financial Creditors") entered
into an agreement (hereinafter referred to as "Plot
Buyer's Agreement") dated 27.06.2011 with IERO
Fiveriver Pvt. Ltd. (hereinafter referred to as
"Corporate Debtor") for the purchase of
a plot in Haryana promoted by the Corporate Debtor under the
project "IERO FIVERIVER". As per the Plot
