# State Bank of India vs. M/s.Varidhi Cotspin Pvt Ltd

> NCLT judgment dated 2026-06-22. Citation: TCN-2026-NCLT-00587. State Bank of India, a financial creditor, filed a Section 7 application under the Insolvency…

- **Court:** NCLT
- **Order date:** 22 Jun 2026
- **Citation:** TCN-2026-NCLT-00587
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-ahmedabad/state-bank-of-india-vs-msvaridhi-cotspin-pvt-ltd-pqwf0

## Summary

### Background

State Bank of India, a financial creditor, filed a Section 7 application under the Insolvency and Bankruptcy Code, 2016 (IBC) against Varidhi Cotspin Private Limited, the corporate debtor. The application sought to initiate the Corporate Insolvency Resolution Process (CIRP) due to an alleged default of Rs 43,39,28,196.47/-. The corporate debtor had availed various credit facilities from a consortium of lenders, including SBI, and failed to make repayments, leading to a loan recall notice. The date of default was identified as 01.07.2024.

## Facts

State Bank of India, as a financial creditor, filed an application under Section 7 of the IBC, 2016, against Varidhi Cotspin Private Limited.

The application seeks to initiate Corporate Insolvency Resolution Process (CIRP) against Varidhi Cotspin Private Limited for a default of Rs 43,39,28,196.47/-.

The date of default committed by the Corporate Debtor is 01.07.2024.

A consortium of lenders, including State Bank of India, granted various credit facilities to Varidhi Cotspin Private Limited, with SBI advancing Rs. 49.50 Crores.

The Corporate Debtor failed to make repayments, leading to a loan recall notice dated 30.11.2024 for Rs. 39,61,93,442.46 (inclusive of interest up to 25.11.2024) plus further interest.

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## Issues and analysis

### Issue 1: Whether the Section 7 application filed by State Bank of India against Varidhi Cotspin Private …

**Ratio:** A Section 7 application is maintainable if a financial debt and default are established,

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**Reasoning:** The NCLT found that the Corporate Debtor admitted financial stress and that a debt had

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**Interpretation:** The NCLT interpreted the IBC's Section 7 as primarily requiring the

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**Application:** The NCLT applied Section 7 of the IBC, 2016, and found that the conditions for

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## Parties

- **Judges:** Chitra Ha…; Velamur G Venkata…
- **Appellants:** State Bank of…
- **Respondents:** Varidhi Cotspin…; M/s.Varidhi…
- **Other parties:** Committee of…; Prawincharan…
- **Advocates:** Nitu Chat…; Aditya…; +1 more

## Timeline

- **2017-08-24 — Consortium Term Loan…**: Copy of consortium Term Loan facility agreement dated 24/08/2017 relied upon by the…
- **2024-07-01 — Date of D…**: The date of default committed by the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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