# In the matter of Adhunik Alloys & Power Limited CP (IB) No. 387-KB-2017

> NCLT judgment dated 2017-08-23. Citation: TCN-2017-NCLT-00532. State Bank of India filed a petition under Section 7 of the Insolvency & Bankruptcy Code, 2016,…

- **Court:** NCLT
- **Order date:** 23 Aug 2017
- **Citation:** TCN-2017-NCLT-00532
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/adhunik-alloys-power-limited-cp-ib-no-387-kb-2017-a85dae96

## Summary

### Background

State Bank of India filed a petition under Section 7 of the Insolvency & Bankruptcy Code, 2016, to initiate Corporate Insolvency Resolution Process (CIRP) against Adhunik Alloys & Power Limited. The petitioner claimed that the corporate debtor defaulted on a loan of Rs. 3,686,100,000, with an outstanding exposure of Rs. 3,299,277,414.71 as of June 30, 2017, including principal, accrued interest, and penal interest. The corporate debtor's account was classified as sub-standard in a CIBIL report.

## Facts

State Bank of India (SBI) filed a petition under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, seeking to initiate Corporate Insolvency Resolution Process (CIRP) against Adhunik Alloys & Power Limited. SBI had granted a loan of Rs. 3,686,100,000 to Adhunik Alloys & Power Limited. As of June 30, 2017, the total outstanding exposure, including principal, accrued interest, and penal interest, amounted to Rs. 3,299,277,414.71. The corporate debtor had defaulted on payments, with a total default of Rs. 302,42,86,418.96 up to June 30, 2017. SBI submitted various documents, including loan agreements, bank statements, and a CIBIL report, to support its claim. The CIBIL report indicated that the corporate debtor's account was classified as sub-standard.

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## Issues and analysis

### Issue 1: Whether the application filed by State Bank of India under Section 7 of the Insolvency & …

**Ratio:** Section 7 of the Insolvency & Bankruptcy Code, 2016, allows a financial creditor to

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**Reasoning:** The court found that the application filed by State Bank of India was complete and

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**Interpretation:** Section 7 provides a mechanism for financial creditors to initiate CIRP against

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**Application:** In this case, the court applied Section 7 to the facts presented by State Bank

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## Parties

- **Judges:** V. P. S…; K.R. J…
- **Appellants:** State Bank of…
- **Respondents:** Adhunik Alloys &…

## Timeline

- **2011-09-23 — Common Loan A…**: Common Loan Agreement…
- **2014-02-20 — Agreement of Corporate…**: Agreement of Corporate Loan…

## 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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