# In the matter of B.S. Krishnan Vs. Stressed Assets Stabilization Fund & Ors. Company Appeal (AT) (Insolvency) No. 521 of 2020

> NCLAT judgment dated 2021-03-17. Citation: TCN-2021-NCLAT-00316. The appeal was filed by B.S. Krishnan, Ex-Director of L.S.P. Agro Ltd. (Corporate Debtor),…

- **Court:** NCLAT
- **Order date:** 17 Mar 2021
- **Citation:** TCN-2021-NCLAT-00316
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/bs-krishnan-vs-stressed-assets-stabilization-fund-ors-company-appeal-ac050ecf

## Summary

### Background

The appeal was filed by B.S. Krishnan, Ex-Director of L.S.P. Agro Ltd. (Corporate Debtor), against the order dated 25.01.2020 passed by the Adjudicating Authority (National Company Law Tribunal) Special Bench, Chennai, which admitted the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (I&B Code) filed by Stressed Assets Stabilization Fund (SASF), Respondent No. 1, and initiated Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. The Adjudicating Authority admitted the application based on the premise that the debt was not time-barred, considering a Debt Recovery Tribunal (DRT) order for payment.

## Facts

On 06.03.1998, Industrial Development Bank of India (IDBI) granted a term loan facility of Rs. 650 lakhs to L.S.P. Agro Ltd. (Corporate Debtor). This amount was disbursed between 21.03.1998 and 08.12.1999. On 09.06.2000, IDBI granted another loan facility of Rs. 425 lakhs, disbursed between 16.06.2000 and 28.09.2000, bringing the total loan amount to Rs. 10.50 Crores. The Corporate Debtor defaulted on repayments, leading IDBI to recall the loan facilities on 15.01.2002, demanding Rs. 110592701. The Corporate Debtor failed to comply. On 06.02.2002, IDBI filed O.A. No. 78 of 2002 before the Debt Recovery Tribunal-I Chennai (DRT). The O.A. was transferred to DRT-II and renumbered as O.A. No. 172 of 2007. The Central Government set up Stressed Assets Stabilization Funds

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the I&B Code filed by the Respondent No. 1 is barred …

**Ratio:** The Hon'ble Supreme Court has held that the date of default to be taken into

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**Reasoning:** The NCLAT relied on the decision of the Hon'ble Supreme Court and a five-member bench

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**Interpretation:** The interpretation of Section 7 of the I&B Code, in conjunction with the

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**Application:** In this case, the Corporate Debtor's account was declared NPA before 2001, and

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## Parties

- **Judges:** Jarat Kuma…; Ashok Kumar…
- **Appellants:** B.S. Kri…
- **Respondents:** L.S.P Agro…; Stressed Assets…

## Timeline

- **1998-03-06 — Loan Facility…**: Industrial Development Bank of India (IDBI) granted a term loan facility of Rs. 650 lakhs…
- **2000-06-09 — Second Loan Facility…**: IDBI granted another loan facility of…

## 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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