# In the matter of State Bank of India Vs. Jai Balaji Industries Limited & Ors. CA(AT)(Insolvency)788-2018

> NCLAT judgment dated 2019-02-08. Citation: TCN-2019-NCLAT-00785. State Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy…

- **Court:** NCLAT
- **Order date:** 8 Feb 2019
- **Citation:** TCN-2019-NCLAT-00785
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/state-bank-of-india-vs-jai-balaji-industries-limited-ors-ca-9992dde3

## Summary

### Background

State Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, for initiating the Corporate Insolvency Resolution Process against Jai Balaji Industries Limited, alleging default in repayment of a loan. Jai Balaji Industries Limited challenged these proceedings before the High Court of Chattisgarh, where an interim order was passed preventing continuation of the proceedings. The Supreme Court dismissed the Special Leave Petition against the modification order. Before the High Court, the Corporate Debtor claimed several winding-up petitions were pending against it. The High Court clarified that its order should not obstruct the hearing of State Bank of India's application. Several Interlocutory Applications were filed in the Section

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## Facts

State Bank of India (SBI), the Financial Creditor, filed an application under Section 7 of the Insolvency and Bankruptcy Code (IBC) against Jai Balaji Industries Limited, the Corporate Debtor, alleging default in loan repayment. Jai Balaji Industries Limited challenged the proceedings in the High Court of Chattisgarh, obtaining an interim order that was later modified. The Supreme Court dismissed a Special Leave Petition related to this order. Before the High Court, the Corporate Debtor argued that several winding-up petitions were pending against it. The High Court clarified that its order should not prevent SBI's application from being heard. Multiple Interlocutory Applications were filed in the Section 7 petition. A winding-up petition (CP No. 822 of 2014) was filed

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## Issues and analysis

### Issue 1: Whether the application under Section 7 of the Insolvency and Bankruptcy Code is maintainable given …

**Ratio:** The legal principle applied is that if a winding-up proceeding has already been initiated

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**Reasoning:** The court reasoned that since the High Court of Calcutta had not passed a specific order

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**Interpretation:** The interpretation is that the pendency of winding-up proceedings does not

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**Application:** In this specific case, the court applied the ratio by noting that the High

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## Parties

- **Judges:** S.J. Mukhop…; Bansi Lal…
- **Appellants:** State Bank of…
- **Respondents:** Jai Balaji…

## Timeline

- **2017-12-27 — Section 7 Application…**: State Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy…
- **2018-10-10 — Adjudicating Authority…**: The Adjudicating Authority (National Company Law Tribunal), Kolkata Bench, held that the…

## 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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