# In the matter of AGP Steels Private Limited CP (IB) No. 148-10-HDB-2017

> NCLT judgment dated 2017-09-21. Citation: TCN-2017-NCLT-00383. The case involves an application filed under Section 10 of the Insolvency and Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 21 Sept 2017
- **Citation:** TCN-2017-NCLT-00383
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/agp-steels-private-limited-cp-ib-no-148-10-hdb-2017-7061ceec

## Summary

### Background

The case involves an application filed under Section 10 of the Insolvency and Bankruptcy Code, 2016, by Shri Somnath Annarao Patil, Director of AGP Steels Private Limited, to initiate the Corporate Insolvency Resolution Process (CIRP). AGP Steels Private Limited was incorporated on 04.04.2003. The company's main business activities include manufacturing, processing, trading, importing, and exporting various types of steel and iron products. The company faced financial difficulties, leading to its classification as a Non-Performing Asset (NPA) by the State Bank of India on 30.06.2016. The bank issued a notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, demanding repayment of outstanding

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## Facts

AGP Steels Private Limited, incorporated on 04.04.2003, is engaged in the business of manufacturing, processing, trading, importing, and exporting various types of steel and iron products. The company's nominal share capital is Rs. 1,50,00,000, divided into 15,00,000 equity shares of Rs. 10 each, while the paid-up capital is Rs. 50,00,000, divided into 5,00,000 equity shares of Rs. 10 each. The State Bank of India (formerly State Bank of Hyderabad) sanctioned a working capital limit to the company, which was revised over time and stood at Rs. 2,50,00,000, along with an SME credit of Rs. 25,00,000. The company has been incurring continuous losses and is unable to discharge its liabilities, leading to a default in repayment of facilities availed from the State Bank of

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## Issues and analysis

### Issue 1: Whether the application for initiating Corporate Insolvency Resolution Process (CIRP) against AGP …

**Ratio:** Section 10 of the Insolvency and Bankruptcy Code, 2016, allows a corporate applicant to

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**Reasoning:** The court considered the financial status of AGP Steels Private Limited, including its

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**Interpretation:** Section 3(12) defines 'default' as non-payment of debt when whole or any part

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**Application:** AGP Steels Private Limited had defaulted in repaying its loans to the State

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## Parties

- **Judges:** Rajeswara Rao…; Ravikumar…; +1 more
- **Respondents:** AGP Steels…

## Timeline

- **2003-04-04 — Incorporation of AGP…**: AGP Steels Private Limited was incorporated under the provisions of the Companies Act,…
- **2004-03-22 — Sanction of Working…**: State Bank of India (erstwhile State Bank of Hyderabad) sanctioned a working capital…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 3(12) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-3)

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