NCLT Admits CIRP Against Garima Real Estate for Rs. 1.15 Crore Default
The National Company Law Tribunal (NCLT) has admitted a Section 7 application filed by 125 investors against Garima Real Estate & Allied Ltd., initiating the Corporate Insolvency Resolution Process (CIRP) for a default of over Rs. 1.15 crore.
NcltCirpGarima Real EstateCorporate DebtorFinancial DebtReal Estate NewsOct 28, 2025
The application originated from an investment scheme in which the company had promised fixed returns to its investors. The Securities and Exchange Board of India (SEBI) had, in 2016, barred the company from raising funds under such schemes and directed it to refund investors, an order which the Corporate Debtor failed to comply with.
The Corporate Debtor did not appear before the Tribunal, and the proceedings were conducted ex parte.
The Financial Creditors, represented by Bhojraj Verma, argued that they were recognized as financial creditors under a government notification. They contended that the investments constituted a 'financial debt' under Section 5(8)(a) of the IBC and that the petition met all statutory requirements, including the post-2019 amendment threshold of 100 joint creditors and the minimum debt of Rs. 1 crore.
The NCLT bench, comprising Justice Mohan P. Tiwari (Judicial) and Sanjeev Sharma (Technical), held that the investors' claim constituted a 'financial debt' and that the petition was maintainable. The Tribunal relied on authoritative NCLAT pronouncements to affirm the status of the investors as financial creditors and confirmed that all procedural thresholds for filing the application were met.
Consequently, the NCLT found that a financial debt and default had been established and admitted the petition. A moratorium was declared, and Mr Gagan Gulati was appointed as the Interim Resolution Professional to take over the management of Garima Real Estate & Allied Limited and oversee the resolution process.
Frequently Asked Questions
What is the Corporate Insolvency Resolution Process (CIRP)?
The Corporate Insolvency Resolution Process (CIRP) is a legal framework under the Insolvency and Bankruptcy Code (IBC) that aims to resolve insolvency and financial distress of a corporate debtor through a time-bound process.
Who filed the Section 7 application against Garima Real Estate & Allied Ltd.?
The Section 7 application was filed by a group of 125 investors against Garima Real Estate & Allied Ltd. for a default of over Rs. 1.15 crore.
What action did SEBI take against Garima Real Estate & Allied Ltd. in 2016?
In 2016, SEBI barred Garima Real Estate & Allied Ltd. from raising funds under investment schemes and directed the company to refund investors.
Who was appointed as the Interim Resolution Professional?
Mr Gagan Gulati was appointed as the Interim Resolution Professional to take over the management of Garima Real Estate & Allied Limited and oversee the resolution process.
What is the significance of the NCLT's ruling in this case?
The NCLT's ruling is significant as it recognized the investors' claim as a 'financial debt' and admitted the petition, initiating the CIRP to resolve the financial distress of the corporate debtor.
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