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

> NCLAT judgment dated 2023-11-10. Citation: TCN-2023-NCLAT-00076. The State Bank of India (SBI) filed an application under Section 7 of the Insolvency and…

- **Court:** NCLAT
- **Order date:** 10 Nov 2023
- **Citation:** TCN-2023-NCLAT-00076
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/state-bank-of-india-vs-dharmraj-aluminium-industries-private-limited-732142ed

## Summary

### Background

The State Bank of India (SBI) filed an application under Section 7 of the Insolvency and Bankruptcy Code (IBC) before the National Company Law Tribunal (NCLT), Mumbai Bench, Court-IV, against Dharamraj Aluminium Industries Private Limited, claiming default. The NCLT dismissed the application, leading SBI to file an appeal before the National Company Law Appellate Tribunal (NCLAT). The NCLT dismissed the application primarily on the ground that it was barred by limitation, as the default occurred on 30.04.2016, and the Section 7 petition was filed on 13.01.2022, which is beyond the three-year limitation period. SBI argued that the period during which a winding-up petition was pending before the Bombay High Court should be excluded from the limitation period, relying on

…

## Facts

State Bank of India (SBI) sanctioned credit facilities to Dharamraj Aluminium Industries Private Limited, including a Cash Credit Facility of Rs.7 crores and a Forward Contract of Rs.0.2 crores on 01.02.2013. These facilities were renewed and advanced over time. The Corporate Debtor defaulted on 30.01.2016, and the 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 for Rs.22,27,07,356/- outstanding as of 19.09.2016. A winding-up petition was filed by M/s Oswal Minerals Limited against the Corporate Debtor, and the Bombay High Court allowed the winding-up petition on 25.01.2018. SBI filed a petition under

…

## Issues and analysis

### Issue 1: Whether the Adjudicating Authority (NCLT) erred in dismissing the Section 7 application filed by …

**Ratio:** The limitation period for filing a Section 7 application under the IBC is generally three

…

**Reasoning:** The NCLAT found that the NCLT had dismissed the Section 7 application primarily on the

…

**Interpretation:** Section 25(3) of the Contract Act provides an exception to the general rule of

…

**Application:** In this case, the NCLAT directed the Adjudicating Authority to determine

…

## Parties

- **Judges:** Ashok Bh…; Barun M…
- **Appellants:** State Bank of…
- **Respondents:** Dharamraj…
- **Advocates:** HARSHIT…; Praful…; +2 more

## 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 14 — Moratorium](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-14)

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclat-new-delhi/state-bank-of-india-vs-dharmraj-aluminium-industries-private-limited-732142ed