# In the matter of State Bank of India vs. Dharmraj Aluminium Industries Private Limited

> NCLAT judgment dated 2023-11-10. Citation: TCN-2023-NCLAT-00079. The case involves an appeal against an order dated 29.11.2022 passed by the National Company…

- **Court:** NCLAT
- **Order date:** 10 Nov 2023
- **Citation:** TCN-2023-NCLAT-00079
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/state-bank-of-india-vs-dharmraj-aluminium-industries-private-limited-5ac5e8b3

## Summary

### Background

The case involves an appeal against an order dated 29.11.2022 passed by the National Company Law Tribunal (NCLT), Mumbai Bench, Court-IV, which dismissed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) filed by State Bank of India (SBI) against Dharamraj Aluminium Industries Private Limited. SBI had sanctioned credit facilities to the corporate debtor, which later defaulted. SBI then initiated recovery proceedings under the SARFAESI Act and also filed a winding-up petition. The NCLT dismissed SBI's Section 7 application, leading to the present appeal before the NCLAT.

## Facts

State Bank of India (SBI) sanctioned credit facilities to Dharamraj Aluminium Industries Private Limited, the Corporate Debtor, on 01.02.2013. The Corporate Debtor defaulted on 30.01.2016, and its account was classified as a Non-Performing Asset (NPA) on 29.04.2016. SBI issued a notice under Section 13(2) of the SARFAESI Act, 2002, on 02.05.2016, and filed O.A. No.762 of 2017 seeking a recovery certificate. A winding-up petition was filed against the Corporate Debtor by M/s Oswal Minerals Limited, and the Bombay High Court ordered the company to be wound up on 25.01.2018. SBI filed a Section 7 application under the IBC on 13.01.2022, claiming Rs.22,52,02,115.61/-, with the date of default mentioned as 30.04.2016. The NCLT dismissed the Section 7 application as being

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority erred in refusing to extend the benefit of Section 14 of the …

**Ratio:** Section 14(2) of the Limitation Act, 1963 allows for the exclusion of time during which

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**Reasoning:** The NCLAT observed that the winding-up petition was filed by a third party (M/s Oswal

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**Interpretation:** Section 14(2) of the Limitation Act is interpreted strictly, requiring the

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**Application:** In this case, the winding-up petition was filed by M/s Oswal Minerals Ltd., not

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## Parties

- **Judges:** Ashok Bh…; Barun M…
- **Appellants:** State Bank of…
- **Respondents:** Dharamraj…

## Timeline

- **2013-02-01 — Sanction of Credit…**: State Bank of India sanctioned Cash Credit Facility of Rs.7 crores and Forward Contract…
- **2016-01-30 — Default by Corporate…**: Dharamraj Aluminium Industries Private…

## 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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