# In the matter of Neeta Chemicals (I) Pvt. Ltd. Vs. State Bank of India CA (AT) No. 174-2017

> NCLAT judgment dated 2018-03-22. Citation: TCN-2018-NCLAT-00334. Neeta Chemicals (I) Pvt. Ltd. filed an application under Section 10 of the Insolvency and…

- **Court:** NCLAT
- **Order date:** 22 Mar 2018
- **Citation:** TCN-2018-NCLAT-00334
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/neeta-chemicals-i-pvt-ltd-vs-state-bank-of-india-ca-6400bf23

## Summary

### Background

Neeta Chemicals (I) Pvt. Ltd. filed an application under Section 10 of the Insolvency and Bankruptcy Code, 2016. The Adjudicating Authority (National Company Law Tribunal), Hyderabad Bench, Hyderabad, dismissed the application with cost. The Adjudicating Authority noted that the loans were availed by the Corporate Debtor in 2009-10, collaterally secured by equitable mortgage, and classified as NPA on 26.12.2013. SARFAESI proceedings were initiated. The Adjudicating Authority found that the application was filed to scuttle SARFAESI proceedings and that the Corporate Debtor had not taken steps to clear the loan, even denying the loans in question. The Adjudicating Authority observed that the Corporate Debtor was making frivolous and untenable contentions, with public

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## Facts

Neeta Chemicals (I) Pvt. Ltd. (the 'Corporate Applicant') filed an application under Section 10 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of the corporate insolvency resolution process. The State Bank of India is the 'Financial Creditor'. The Adjudicating Authority (National Company Law Tribunal), Hyderabad Bench, dismissed the application, noting that the Corporate Debtor had availed loans in 2009-10, which were collaterally secured and classified as NPA on 26.12.2013. SARFAESI proceedings were initiated. The Adjudicating Authority found that the application was filed to scuttle SARFAESI proceedings and that the Corporate Debtor had not taken steps to clear the loan, even denying the loans. The Corporate Debtor's account was classified as NPA as

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority was justified in rejecting the application under Section 10 of …

**Ratio:** The Adjudicating Authority cannot reject an application under Section 10 if it is

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**Reasoning:** The Appellate Tribunal relied on the Supreme Court's decision in 'Innoventive Industries

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**Interpretation:** Section 10 of the I&B Code provides for the initiation of the corporate

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**Application:** In this case, the Appellate Tribunal found that the Adjudicating Authority had

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## Parties

- **Judges:** S.J. Mukhop…; Bansi Lal…
- **Appellants:** Neeta Chemicals…
- **Respondents:** Neeta Chemicals…; State Bank of…
- **Advocates:** Alok…; Varsha Ba…; +9 more

## Timeline

- **2009-01-01 — Loans Av…**: Loans were availed by the…
- **2013-12-26 — Account Classified as…**: Loans in question are classified as…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 10 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-10)

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