# In the matter of State Bank of India. Vs. Sri Lakshmikantha Spinners Ltd. CA(AT)(Insolvency) No. 718-2019

> NCLAT judgment dated 16 Jul 2019. Citation: TCN-2019-NCLAT-00449. The State Bank of India filed an appeal against an order dated July 5, 2019, passed by the…

- **Court:** NCLAT
- **Order date:** 16 Jul 2019
- **Citation:** TCN-2019-NCLAT-00449
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/state-bank-of-india-vs-sri-lakshmikantha-spinners-ltd-ca-1d237004

## Summary

### Background

The State Bank of India filed an appeal against an order dated July 5, 2019, passed by the Adjudicating Authority (National Company Law Tribunal), Hyderabad Bench. The application under Section 7 of the Insolvency and Bankruptcy Code, 2016, filed by the State Bank of India against Sri Lakshmikantha Spinners Ltd. (Corporate Debtor), had been adjourned 15 times. The appellant's grievance was that the Section 7 application, filed in July 2018, had been adjourned repeatedly for over a year without any order on merits, due to the Corporate Debtor seeking time for settlement without any settlement being reached.

## Facts

The State Bank of India (Appellant) filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, against Sri Lakshmikantha Spinners Ltd. (Corporate Debtor). The application was filed with the National Company Law Tribunal (NCLT), Hyderabad Bench. The application had been adjourned 15 times over more than a year. The adjournments were primarily due to the Corporate Debtor seeking time for settlement. No settlement was reached between the parties. The Appellant filed an appeal against the NCLT's order of adjournment. The grievance of the Appellant is that the application under Section 7 was filed in July 2018, but for more than one year, it has been adjourned 15 times and no order passed on merits on the ground that the ‘Corporate Debtor' was asking

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority (NCLT) was justified in repeatedly adjourning the Section 7 …

**Ratio:** The ratio is that applications under Section 7 of the Insolvency and Bankruptcy Code,

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**Reasoning:** The court reasoned that the Section 7 application had been pending for more than one year

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**Interpretation:** The interpretation is that the Adjudicating Authority has a duty to ensure that

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**Application:** The ratio and reasoning were applied to the specific facts of the case, where

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## Parties

- **Judges:** S.J. Mukhop…; Kanthi Na…
- **Appellants:** State Bank of…
- **Respondents:** Lakshmikantha…

## Timeline

- **2018-07-01 — Section 7 Application…**: State Bank of India filed an application under Section 7 of the Insolvency and Bankruptcy…
- **2019-07-05 — Order by Adjudicating…**: Adjudicating Authority (National Company Law Tribunal), Hyderabad Bench, passed an order…

## 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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