# In the matter of Sh. B. Prashanth Hegde, Suspended Managing Director, Metal Closures Pvt. Ltd. Vs. State Bank of India, Stressed Assets Management Branch & Anr. CA (AT) (Insolvency) No. 68 of 2019

> NCLAT judgment dated 2019-09-26. Citation: TCN-2019-NCLAT-00242. The case involves an appeal against the order dated 14th December, 2018, passed by the…

- **Court:** NCLAT
- **Order date:** 26 Sept 2019
- **Citation:** TCN-2019-NCLAT-00242
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/sh-b-prashanth-hegde-suspended-managing-director-metal-closures-pvt-ltd-vs-state-942366fb

## Summary

### Background

The case involves an appeal against the order dated 14th December, 2018, passed by the Adjudicating Authority (National Company Law Tribunal), Bengaluru Bench, which admitted an application for initiating the Corporate Insolvency Resolution Process against Metal Closures Pvt. Ltd. The Appellant-Director challenged the order, arguing that the application under Section 7 of the Insolvency and Bankruptcy Code (I&B Code) was barred by limitation.

## Facts

State Bank of India granted credit facilities to Metal Closures Pvt. Ltd. ('Corporate Debtor') since 2007. Corporation Bank started granting credit facilities since August 14, 2009. On January 31, 2010, the account was classified as an NPA by State Bank of India but was restructured on February 17, 2010. Punjab National Bank entered the consortium on June 26, 2010. The Corporate Debtor's financial rating was done on July 2, 2013, by ICRA. A Joint Lenders Meeting was held on April 28, 2014. On June 21, 2014, the Consortium entered into a Master Joint Lenders Forum Agreement. The Corporate Debtor was declared an NPA by State Bank of India on May 28, 2014, and by Punjab National Bank on June 30, 2014. State Bank of India appointed Concurrent Auditors for Bangalore Plant

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the …

**Ratio:** The period of limitation for an application under Section 7 of the I&B Code is

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**Reasoning:** The court reasoned that the right to apply under Section 7 of the I&B Code accrued to

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**Interpretation:** The interpretation of Article 137 of the Limitation Act, 1963, in the context

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**Application:** Since the I&B Code came into force on 1st December, 2016, and the

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## Parties

- **Judges:** S.J. Mukhop…; A.I.S. C…; +1 more
- **Appellants:** Sh. B. Prashanth…
- **Respondents:** Metal Closures…; State Bank of…

## Timeline

- **2018-12-14 — Order by Adjudicating…**: Adjudicating Authority (National Company Law Tribunal), Bengaluru Bench passed an order…
- **2019-09-26 — Judgement…**: Date of the judgement…

## 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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