# In the matter of Bharath Infra Exports and Imports Ltd. C.P. (IB) No. 112-BB-2019

> NCLT judgment dated 2020-12-22. Citation: TCN-2020-NCLT-00030. State Bank of India initiated Corporate Insolvency Resolution Process (CIRP) against Bharath…

- **Court:** NCLT
- **Order date:** 22 Dec 2020
- **Citation:** TCN-2020-NCLT-00030
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/bharath-infra-exports-and-imports-ltd-cp-ib-no-112-bb-2019-624cf87d

## Summary

### Background

State Bank of India initiated Corporate Insolvency Resolution Process (CIRP) against Bharath Infra Exports and Imports Limited under Section 7 of the Insolvency and Bankruptcy Code, 2016, alleging default on a total outstanding amount of ₹146,93,93,281.78 as of 31.01.2019. The corporate debtor contested the application, citing disputes over account statements, illegal debits, and pending proceedings before other forums. The NCLT is tasked with determining whether a default has occurred and whether CIRP should be initiated.

## Facts

State Bank of India (SBI) filed a petition under Section 7 of the Insolvency and Bankruptcy Code (IBC) to initiate Corporate Insolvency Resolution Process (CIRP) against Bharath Infra Exports and Imports Limited, claiming a default of ₹146,93,93,281.78 as of 31.01.2019. SBI had sanctioned fund-based and non-fund-based credit facilities to the Corporate Debtor, including financial assistance, enhancements, and working capital limits. The Corporate Debtor's account was declared a Non-Performing Asset (NPA) on 17.01.2017. The Corporate Debtor contested the petition, alleging that SBI had filed the application based on an imaginary occurrence of default and unilateral entries in account statements. The Corporate Debtor also claimed that SBI illegally transferred ₹2.03

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## Issues and analysis

### Issue 1: Whether the Financial Creditor has established the existence of a financial debt and default by the …

**Ratio:** Section 7 of the I&B Code allows a financial creditor to initiate CIRP against a

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**Reasoning:** The NCLT considered the rival contentions regarding the existence of a financial debt and

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**Interpretation:** The NCLT interpreted Section 7 of the I&B Code to require the establishment

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**Application:** The NCLT found that there was no dispute as far as the sanctioning of the

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## Parties

- **Judges:** Ashutosh C…; Rajeswara Rao…
- **Appellants:** State Bank of…
- **Respondents:** Bharath Infra…

## Timeline

- **1955-07-01 — Incorporation of State…**: State Bank of India was…
- **2007-07-17 — Incorporation of Bharath Infra Exports and…**: Bharath Infra Exports and Imports Limited was…

## 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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