# In the matter of Electrosteel Castings Limited Vs. UV Asset Reconstruction Company Limited Company Appeal (AT) (Insolvency) No. 159 of 2022

> NCLAT judgment dated 2022-03-09. Citation: TCN-2022-NCLAT-00588. This case involves an appeal against an order dated 03.02.2022 passed by the National Company…

- **Court:** NCLAT
- **Order date:** 9 Mar 2022
- **Citation:** TCN-2022-NCLAT-00588
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/electrosteel-castings-limited-vs-uv-asset-reconstruction-company-limited-company-00a4a7b0

## Summary

### Background

This case involves an appeal against an order dated 03.02.2022 passed by the National Company Law Tribunal (NCLT), Cuttack Bench, which rejected IA No.139/CB/2021. The appellant, Electrosteel Castings Limited (ESL), sought a stay of proceedings in CP(IB)No.16/CB/2021, which was an application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 by UV Asset Reconstruction Company Limited (the respondent). ESL had availed financial assistance from SREI Infrastructure Finance Limited, secured by a third-party mortgage. Subsequently, the State Bank of India initiated Corporate Insolvency Resolution Process (CIRP) against ESL, which led to a resolution plan approved in 2018. The respondent, as assignee of SREI, initiated proceedings under the SARFAESI Act,

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## Facts

Electrosteel Castings Limited (ESL) availed financial assistance of Rs. 500,00,00,000 from SREI Infrastructure Finance Limited, secured by a third-party mortgage. State Bank of India initiated CIRP against ESL under Section 7 of the IBC, which commenced on July 21, 2017. A resolution plan submitted by Vedanta Limited was approved on April 17, 2018, involving a deposit of INR 5320 Crores and conversion of debt into equity shares. SREI assigned its debt to UV Asset Reconstruction Company Limited on June 30, 2018. The Respondent initiated SARFAESI proceedings in December 2018. The Appellant filed Application No.4322 of 2019 before the Madras High Court and an application under Section 17 of the SARFAESI Act before the DRT in July 2019. The Madras High Court rejected the

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority committed an error in rejecting IA No.139 of 2021 filed by the …

**Ratio:** The jurisdiction of the Adjudicating Authority to determine whether there is a financial

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**Reasoning:** The Adjudicating Authority has the power to determine the existence of a financial debt

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**Interpretation:** The Adjudicating Authority's power under Section 7 of the IBC is broad and not

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**Application:** The NCLAT held that the Adjudicating Authority did not err in rejecting the

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## Parties

- **Judges:** Ashok Bh…; Alok Sriv…
- **Respondents:** Electrosteel…; UV Asset Reconstru…
- **Advocates:** Kapil S…; Ramji Srin…; +9 more

## Timeline

- **2011-07-26 — Financial Ass…**: Electrosteel Castings Limited availed financial assistance from SREI Infrastructure…
- **2017-07-21 — CIRP Init…**: Corporate Insolvency Resolution Process…

## 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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