# In the matter of Nirmal Kumar Agarwal vs. State Bank of India & Ors.,Company Appeal (AT)(Ins)No. 983 of 2019

> NCLAT judgment dated 2022-12-19. Citation: TCN-2022-NCLAT-00018. This case involves an appeal against an order dated 04.09.2019, where an application under…

- **Court:** NCLAT
- **Order date:** 19 Dec 2022
- **Citation:** TCN-2022-NCLAT-00018
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/nirmal-kumar-agarwal-vs-state-bank-of-india-orscompany-appeal-e4cb53ba

## Summary

### Background

This case involves an appeal against an order dated 04.09.2019, where an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) was admitted by the Adjudicating Authority (National Company Law Tribunal, Kolkata Bench, Kolkata) filed by State Bank of India (Financial Creditor) against Sungrowth Share and Stocks Limited (Corporate Guarantor) due to a default by the Corporate Debtor (M/s Adhunik Alloys & Power Limited). Adhunik Alloys & Power Limited was already undergoing Corporate Insolvency Resolution Process (CIRP) since 23.08.2017. State Bank of India had also submitted its claim in those proceedings.

## Facts

M/s Adhunik Alloys & Power Limited defaulted on a financial debt of Rs. 63,04,53,226/-. State Bank of India, as a financial creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) against Sungrowth Share and Stocks Limited, the corporate guarantor, for recovery of Rs. 30 Crores. Sungrowth stood as a guarantor vide Deed of Guarantee dated 23.09.2011. M/s Adhunik Alloys & Power Limited was already undergoing Corporate Insolvency Resolution Process (CIRP) since 23.08.2017. Sungrowth was registered as a non-banking financial institution (NBFC) with the Reserve Bank of India (RBI) under registration no. B.05.03435, issued on 28.03.2001. The Section 7 application was filed on 08.06.2018. Sungrowth's NBFC certificate was

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## Issues and analysis

### Issue 1: Whether the application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 against …

**Ratio:** The legal principle is that proceedings against a financial service provider can only be

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**Reasoning:** The court reasoned that Sungrowth, being a registered NBFC at the time the Section 7

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**Interpretation:** The interpretation of Section 3(7), 3(17), and 3(18) of the IBC, along with

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**Application:** The court applied this principle to the facts by noting that Sungrowth was

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## Parties

- **Judges:** Rakesh Kuma…; KanthiNar…
- **Appellants:** Nirmal Kumar…
- **Respondents:** Adhunik Alloys &…; State Bank of…
- **Advocates:** Anup K…; Shruti…; +3 more

## Timeline

- **2017-08-23 — CIRP Init…**: Corporate Insolvency Resolution Process (CIRP) initiated against M/s Adhunik Alloys &…
- **2018-03-28 — NBFC Certi…**: Sungrowth issued…

## 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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