# In the matter of State Bank of India vs. Abhijeet Ferrotech Limited

> NCLAT judgment dated 2024-07-02. Citation: TCN-2024-NCLAT-00354. The State Bank of India (SBI) filed an appeal challenging the order dated 21.03.2023 passed…

- **Court:** NCLAT
- **Order date:** 2 Jul 2024
- **Citation:** TCN-2024-NCLAT-00354
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/state-bank-of-india-vs-abhijeet-ferrotech-limited-d4dccd21

## Summary

### Background

The State Bank of India (SBI) filed an appeal challenging the order dated 21.03.2023 passed by the National Company Law Tribunal (NCLT), Cuttack Bench, which rejected Section 7 application filed by SBI to initiate Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, Abhijeet Ferrotech Ltd. The NCLT rejected the application, framing a question of whether the proceeding was barred due to a prior order by DRT-II, Kolkata. The NCLT answered in favor of the Corporate Debtor, stating the matter was substantially the same as an appeal pending before DRAT. The appellant argued that proceedings under Section 19 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, are not a bar to entertaining a Section 7 application under the IBC.

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## Facts

The State Bank of Travancore sanctioned a loan of Rs.99 crores to Abhijeet Ferrotech Limited on 17.03.2012. On 08.04.2013, the working capital limit of Rs.99 crores was renewed for another 12 months. On 31.03.2013, the accounts of Abhijeet Ferrotech Limited were declared as Non-Performing Assets (NPA). SBI and other consortium lenders entered into a Master Restructuring Agreement on 28.09.2013. On 14.02.2014, State Bank of Travancore restructured credit facilities, sanctioning Rs.89,46,00,000/-. On 26.03.2014, a Deed of Accession and Modification on Master Restructuring Agreement was executed. On 23.12.2015, State Bank of Travancore sanctioned an additional limit of Rs.36,74,00,000/-. On 28.12.2015, State Bank of Travancore sanctioned Rs.1,26,20,00,000/-. On

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## Issues and analysis

### Issue 1: Whether the proceeding of this petition is barred in view of the order passed by DRT-II, Kolkata in …

**Ratio:** Section 238 of the IBC provides an overriding effect over other laws, including the

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**Reasoning:** The NCLAT reasoned that the Adjudicating Authority erred in relying on Section 10 of the

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**Interpretation:** The interpretation of Section 238 of the IBC is crucial. It ensures that the

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**Application:** The NCLAT applied the ratio by stating that the DRT order and the Section 19

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## Parties

- **Judges:** Ashok Bh…; Barun M…
- **Appellants:** State Bank of…
- **Respondents:** Abhijeet Ferrotech…; ABHIJEET FERROTECH…

## Timeline

- **2012-03-17 — Loan Sanc…**: State Bank of Travancore sanctioned a loan of…
- **2013-03-31 — Account Decla…**: The accounts of Abhijeet Ferrotech Limited were…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 19 — Personnel to extend co-operation to interim…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-19)

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