# In the matter of Raja Sekhara Rao Narayanam & Ors. vs. Kalvakolanu Murali Krishna Prasad & Ors. (IA Nos.270 & 945/2024 in CA (AT) (CH) (Ins) No.98/2024]

> NCLAT judgment dated 2026-03-19. Citation: TCN-2026-NCLAT-00107. The appeal was filed against the NCLT Hyderabad order dated 14.02.2024, which admitted…

- **Court:** NCLAT
- **Order date:** 19 Mar 2026
- **Citation:** TCN-2026-NCLAT-00107
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-chennai/raja-sekhara-rao-narayanam-ors-vs-kalvakolanu-murali-krishna-prasad-ors-1009fb4f

## Summary

### Background

The appeal was filed against the NCLT Hyderabad order dated 14.02.2024, which admitted Section 7 application filed by Canara Bank for initiating CIRP against Ananda Bharathi Fertilisers India Pvt Ltd.

## Facts

NCLT Hyderabad admitted Section 7 application filed by Canara Bank.

Corporate Debtor was incorporated on 14.02.2011 for manufacturing fertilisers and soil conditioners.

Financial Creditor sanctioned a term loan of Rs. 9 crore and working capital loan of Rs. 1.10 crore on 24.03.2016.

Corporate Debtor defaulted in repayment, and the account was classified as NPA on 03.06.2018.

Loans were restructured in 2019, creating FITL-I and FITL-II.

Financial Creditor initiated SARFAESI proceedings and issued demand, possession, and redemption notices.

Corporate Debtor requested a one-time settlement (OTS), which was rejected.

Appellants obtained a conditional stay from DRT-I, Hyderabad, and deposited Rs.1.20 crore.

…

## Issues and analysis

### Issue 1: Whether delay in disbursal of working capital loan would act as a bar for the Financial Creditor to …

**Ratio:** Rejection of a Section 7 application on the ground that for default committed by the

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**Reasoning:** The Adjudicating Authority is not required to go into the reasons of default and ignore

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**Interpretation:** Even if the Financial Creditor is partly to blame for the default, CIRP can be

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**Application:** The delay in disbursal of working capital loan does not bar the Financial

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## Parties

- **Judges:** Sharad Kumar…; Jatindranat…
- **Appellants:** Raja Sekhara Rao…; Kasa L…; +1 more
- **Respondents:** Ananda Bharathi…; Canara…
- **Other parties:** Kalvakolanu…
- **Advocates:** Sudhir N…; JVL Bha…; +3 more

## Timeline

- **14.02.2024 — NCLT Ord…**: NCLT Hyderabad passed an order allowing the application filed under Section 7 of IBC by…
- **14.02.2011 — Incorpor…**: Corporate Debtor was…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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